Living wage 'significantly reduces' low pay.
The proportion of low-paid workers in Britain has fallen to its lowest level since 1980.
And low pay could be eliminated altogether by the middle of the 2020s, a new report predicts. Chancellor Philip Hammond has also signalled a willingness to increase the national living wage still further.
The government is consulting on a further increase - potentially to two-thirds of median earnings - in a move experts have said would raise concerns about productivity and affordability for businesses. Mr Hammond said the national living wage had achieved its original goal of significantly reducing low pay, and the government would now consult on "where to go next" in relation to further increases.
"We are naturally attracted to look at whether it is possible to push up the national living wage to 66 per cent of median earnings over a sensible time period in a way that would allow us to eliminate low pay in the UK," Hammond said.
"But we would only do that if we can be confident that we can do it without damaging the employment prospects of people with lower skills."
New research by the Resolution Foundation suggested that the introduction of the national living wage three years ago had "significantly" reduced low pay - from 20.7 per cent of the workforce in 2015 to 17.1 per cent last year. The number of low-paid workers fell by almost 200,000 last year, including more than 130,000 women and 120,000 people aged 21-30, said the report.
The biggest falls were said to have taken place in administrative and support services, and retail, where the number of lowpaid workers fell 110,000. The think-tank said raising the living wage to a level which would end low pay would represent a further "huge change" to the labour market.