Commission Rejects Calls For Mandatory London Minimum Wage

city hallThe Living Wage Commission rejected calls for a London minimum wage on Tuesday, saying it should be up to employers.

The London Living Wage (LLW), currently £8.80 per hour, has been adopted by the private and public sector across the capital. Although the scheme is backed by Mayor of London Boris Johnson, it’s not mandatory and many companies still pay the national minimum wage of £6.31 or the Living Wage of £7.65, despite the steep costs of living in London for low paid staff.

Political support for the LLW is one thing, but with no legislation in place, there’s no obligation for companies to increase wages — effectively a green light for campaigners to put public pressure on them. Cinema workers at the Ritzy in Brixton recently received public support from director Ken Loach over a series of strikes, while University and College Union (UCU) student members have held protests over staff pay.

The increased cost of living plus zero hour contracts and wage cuts have pushed many of London’s low paid into the ‘working poor’. In April, we reported that one in four London households is on housing benefit and a 2013 low-pay report revealed that 16% of Londoners are paid less than the LLW. Despite the clear link between low pay and a rocketing benefits bill, ministers are reluctant to make the LLW a reality. Green Party AM Jenny Jones said:

“The living wage campaign has been a stunning success, but now it is time for the Mayor to ensure everyone in London is paid a wage they can build a life on. His voluntary approach is only reaching a tiny number of employers, so he should join me in calling for big businesses and government departments to be required to pay a living wage.

Paying everyone a living wage would slash the benefit bill, freeing up billions over the next few years for the Mayor to invest in job creation schemes like housing and renewables. This could help to offset any extra unemployment created.”

The mayor has been criticised for appearing to depart from his manifesto pledge to lobby the government over paying the LLW in Whitehall. In fact, a Citizens UK report last summer identified a number of government departments who don’t pay the LLW, with some paying just the national minimum wage. The Ritzy campaign was raised at Mayor’s Question Time on 11 June, and while Boris Johnson reiterated that companies able to pay the LLW should do so, there’s no sign of it being compulsory.

As of November 2013, there were 216 companies paying the LLW, while workers at Haringey council and London-based cleaning form CTS recently won their battle to increase their wages.

Photo by markdbaynham in the Londonist Flickr pool.

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  • Adam

    Comprise: make the Living Wage compulsory for people over 21?

  • Adam

    Compromise, sorry.