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How has pay changed over the years?

Jeff Moore people walking graffiti
Jeff Moore people walking graffiti

More than two million Londoners are living in poverty. And of all adults in poverty, more than half are employed.

Work is meant to be the best route out of poverty. But it’s often not enough. And many more working Londoners, who aren’t classed as living in poverty, are still struggling to get by or have a decent standard of living. Here, we look at how pay has changed over time, and ask what that means for our living standards.


  • Lower earners in London are paid more per hour than at any point in the last two decades.
  • But their annual pay hasn’t grown to the same extent. Lower earners are paid 11% less per year than they were in 2008. In contrast, in the rest of England, lower earners are paid 7% more per year than they were in 2008.
  • This shows the difference between yearly and hourly pay. As well as low pay, precarious work and insecure hours are two key issues in London.

About this data

Here we’ll look at pay through different lenses:

  • How much we are paid per year
  • How much we are paid per hour

By looking at these different measures, we can get a better understanding of how the pay rate – and our wages – has changed over time, as well as how this translates into our yearly earnings, and, by extension, our standard of living. Because hourly pay is our flat wage whereas yearly pay is affected by how many hours we work, they don’t change in the same way.

Understanding changes to average earnings are important, but to understand the fuller picture we need to see what’s happening across a range of high and low pay too, so here we focus on three points in the earnings distribution of working Londoners:

  • Londoners at the 10th percentile (who earn less than 90% of other Londoners). Here we call this group lower-earners.
  • Median earners (who earn more than half of Londoners, and less than half of Londoners).Here we call this group middle-earners.
  • Londoners at the 90th percentile (who earn more than 90% of other Londoners). Here we call this group higher-earners.

All of the data here uses pay in 2008 (before the financial crash) as a baseline.

How has our wage changed over time?

Change in real hourly gross pay by job pay percentile in London (2023)

In the last year, lower earning Londoners are the only group to see hourly pay increase – very slightly, by 0.5%. For every other earnings group, hourly pay has decreased in the last year. This reflects a longer-term trend for hourly pay. In both the last five and ten years, the three lowest earning groups have all seen increases in hourly pay in both the last five years and the last ten years – while the highest earning five groups have all seen decreases in hourly pay in these time periods.

In the last decade Londoners at the 10th income percentile (who earn less than 90% of other Londoners) earn 19% more. And as the chart below shows, this group are also paid more per-hour than at any point in the last two decades. This is likely to reflect the successes of both the national minimum wage increases and the real Living Wage campaign, boosting the pay per-hour of millions of low earners.

Indexed gross hourly pay in London and England (2002-2023)

But, sadly, the data tells a different story when looking at yearly pay.

Change in real annual gross pay by job pay percentile in London (2022/23)

From this chart, we initially see a similar trend in yearly pay to pay per hour. In the last year, almost every group shown here has seen a decrease in yearly pay in the last 12 months (from 2021/22-2022/23). In the last ten years, we can see that lower earners in London have seen their pay increase more than other groups. Compared to ten years ago, lower-earning Londoners are now paid 9% more per year. But when we look at a time-series of how this has changed in the longer term, a different story emerges.

Indexed gross annual pay in London and England (2000/01 - 2022/23)

Compared to 2008, lower earning Londoners are paid 11% less per year. This is despite being paid more per hour than they were in 2008. This time series also shows that although the sharp rise in pay in the last ten years for lower earners suggests positive change, it is partially driven by the fact that after the 2008 crash, lower earners’ pay fell further. In 2013/14, Londoners at the 10th percentile were paid 22% less than in 2008 – compared to 12% and 11% for median and higher earners, respectively.

Is it different between London and the rest of England?

When we look at pay-per-hour, we see a similar story for lower earners in the rest of England to what we see in London. Compared with 2008, both lower earners in London and the rest of England are paid more – though those in the rest of England have seen a bigger increase (19% compared to 12%).

When we looked at yearly pay, we saw that although they are paid more per hour, lower earners in London earn less than they did in 2008. This isn’t the case in the rest of England. Following the financial crash, yearly pay for lower earners recovered more quickly to 2008 levels in the rest of England than London – and bar a slight dip in the last year, it has continued to grow. Compared to 2008, lower earners in the rest of England are paid 7% more per year – while in London, they’re paid 11% less.

What does all this mean?

The increase in hourly pay for the lowest earners in London is a great success story. Since 2008, the minimum wage has increased significantly, and the Living Wage movement has increased the wage of millions of the lowest earners, in turn lifting people out of poverty.

But the fact that when we look at yearly pay in London, the same increase isn’t seen, highlights that it’s not just about pay. One reason that yearly pay hasn’t improved to the same level as hourly for people on the lowest incomes is that many still find themselves in precarious work, and total hours worked for low earners in London has decreased from 18.7 per week in 2008 to 16.1 in 2023. Alongside fair pay, it’s vital that people are able to work enough hours to get by.

The Living Wage Campaign’s Living Hours campaign is doing vital work in this area. So far, 131 employers have become Living Hours accredited, leading the way on security of hours alongside a real Living Wage.

How much should we be paid?

We’ve looked at how our pay has changed over time, and how this compares to the baseline of 2008. While this is important, it doesn’t tell us whether lower earners were paid enough to begin with.

Two ways of looking at what ‘fair pay’ should look like are the real Living Wage and the Minimum Income Standard.

Find out more about the real Living Wage.

Find out more about Minimum Income Standard London.

The data in this blog comes from London's Poverty Profile. Explore the profile here.