580,000 workers, one in five in London, get less than the poverty wage (£8.30) of the “London Living Wage” (LLW). Though the national minimum wage is £6.19 per hour, in London it is too little to live on. The LLW is defined as the basic living wage in the capital.
The government could save almost £1bn per year if all workers in London were paid at least the LL Wage, because of the higher tax revenue, and a reduction in welfare spending. Professor Jana Wills who steered the work observed:
Poverty levels among people who are in work have grown, making the campaign for a living wage more important than ever. It's clear that the LL Wage can benefit everybody concerned—employees and employers as well as the tax-paying public. Businesses that have introduced the wage have seen a 25 per cent fall in the number of staff who leave, better workplace relationships develop as a result and better psychological health amongst those employed in living wage workplaces.
Companies interviewed for the study suggest that the reputational benefits of paying the LL Wage have helped them attract new business. Employers also reported that demonstrating corporate social responsibility by paying the LL Wage has proven hugely beneficial in attracting high calibre graduate recruits. While wage costs increase for businesses, the impact can be minimised through adjusting working practices to increase efficiency.
A workplace survey found that half of employees (54 per cent) felt more positive about their workplace once the LL Wage was introduced, with 52 per cent feeling more loyal to their employers. Almost one third (32 per cent) of the London workers surveyed felt the higher wage benefitted their family. One in four began to be able to save a little or buy occasional special items. A two person household could earn up to an extra £5,000 per year.