Progress | Centre-left Labour politics

Low pay London needs a pay rise

Low pay is a feminist issue – so said Tessa Jowell this week as she announced her plans for a new, higher minimum wage for London. On both counts, she’s right.

Research published by the Trade Union Congress shows that 60 per cent of those on low pay are women and over a quarter of women earn less than the living wage, compared to 16 per cent of men. The gender pay gap still exists at 9 per cent.

Women are paid less than men, and women are hit hardest by low pay. So do not let anyone tell you that women now have equality in the workplace. There is an awfully long way to go.

The case for an increased minimum wage, especially for London, is clear. Yes, London has a lot going for it – our economy is growing, our population is set to rise by a million over the next decade and we are a city of unparalleled diversity where people feel they belong. But London can only maintain its claim to be a great world city if the people who live and work here can afford to take advantage of all it has to offer. Unless the capital works for everyone who lives here, regardless of their income or circumstances, we risk losing our great world city status.

Here in London the earnings of the low paid are kept flat by the globalised nature of London’s hugely competitive labour market. In my borough of Haringey a quarter of working residents earn less than the living wage of £9.15 an hour

These are the people who keep our city running who stand to benefit most from a higher minimum wage for London – the care workers, shop assistants, cleaners and restaurant staff.

Struggling to cope on limited incomes with increased living costs far outstripping wage rises, this group of Londoners is feeling the financial pressures of austerity. As a result they are finding it increasingly difficult to stand still and many are leading a day-to-day existence unable to plan for the long term. They are struggling with rents 50 per cent higher than the rest of the UK, a 50 per cent increase in pay-as-you-go Oyster card trips since 2008, and a 40 per cent hike in childcare costs in the during the last five years.

An increased minimum wage for London would make a real difference to many of these people’s lives – the low paid who have felt the sharp end of the cost of living crisis in the capital over the past decade.

Tessa Jowell’s call for a higher minimum wage for London therefore comes at a critical time and would be a big step in the right direction.

As Tessa points out, analysis by the Centre for London has demonstrated that an increase of £1.30 an hour would not cost jobs. Increasing the minimum wage is good economics; it increases the spending power of individuals but also puts more money into our local economies.

But this is just the first step. We need to focus on both the demand side and the supply side of the labour market by creating jobs in the sectors of the future, and equipping Londoners to get those jobs. Increasing the earning power of those earning a minimum wage is central to giving many Londoners a better future and ensuring the capital works as a place for everyone.

Low pay London deserves – needs – a pay rise. Low pay and pay inequality must be top of the agenda for the next mayor of London. Our city may be the best in the world, but we will not stay that way by standing still. Exciting ideas like this can keep London, and everyone who lives here, moving forward.

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Claire Kober is leader of Haringey council

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Photo: Echoplex7

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Claire Kober

is leader of Haringey council

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