The London Living Wage has risen above £10 for the first time, Mayor Sadiq Khan announced Monday, with the hourly rate increasing 45p to £10.20.
More than 1,500 employers now pay the voluntary wage, which helps to offset the higher cost of living in the capital - a 50 per cent increase since Sadiq became Mayor.
It comes as the Mayor called for more businesses to pay the wage to help combat in-work poverty. Some 60 per cent of Londoners living in poverty are in working households, compared with fewer than a third of Londoners twenty years ago.
“London is one of the most dynamic and prosperous economies in the world, but unfortunately this prosperity isn’t shared by all Londoners,” Sadiq said.
“In the capital today, more than two million people are struggling to make ends meet and the ethnic pay gap is shockingly and unacceptably large. I want to make sure that no one who goes to work every day should have to endure the indignity of poverty.”
The new wage will also help to offset the effects of inflation, which hit 2.8 per cent in September 2017, its highest rate since March 2012, according to the Office for National Statistics.
The London Living Wage is the amount regarded as sufficient for a worker in London to provide their families with the essentials of life plus a cushion against unforeseen events.
“Great businesses know that, even during these tough times, not only is fair pay the right thing to do but paying the real Living Wage brings big benefits,” said Katherine Chapman, Director of the Living Wage Foundation.
“Nine out of ten accredited Living Wage employers report real benefits including improved retention, reputation, recruitment and staff motivation,” she said.
The Living Wage Foundation calculates the hourly wage through the Living Wage Commission, which bases it on basket of goods used to measure the cost of a decent standard of living.
The Mayor will next year launch the Good Work Standard to promote fair pay and support employers on achieving better standards of workplace diversity, flexible working, health and wellbeing, skills development and more.