More than 1,000 of the lowest paid council workers in Leicester could be in line for a wage rise.
City mayor Sir Peter Soulsby says he is looking to ensure all of his staff are paid at least £7.45 an hour – the newly-set Living Wage.
The amount reflects the amount a person needs to cover basics such as food, health and accommodation, and is higher than the £6.19 minimum wage enforceable by law.
Sir Peter said it would cost £400,000 to raise the wages of 1,199 city council staff – mainly kitchen workers, cleaners and school lunchtime supervisors – who fall below that level.
Sir Peter, whose mayoral election manifesto included a promise to campaign for the Living Wage in Leicester, said: "There is a strong case for us setting an example on this.
"It will cost us £400,000. I am looking to see if I can make it part of the budget we are working on.
"But this is a time where we are facing savage Government cuts to our budget."
A week of events aimed at promoting the Living Wage began yesterday, with Labour Party leader Ed Miliband outlining plans he would put in place to make it the norm should he win the next General Election.
The proposals include only offering Government contracts to firms paying the Living Wage and naming and shaming firms and organisations that do not pay it.
Leicestershire Chamber of Commerce chief executive Martin Traynor said it should be left to firms to decide.
He said: "I have no problem with the principle but it has to be decided by the company according to what it can afford.
"The last thing we want is wage inflation, which could harm companies' recovery from the recession.
"If it becomes the difference between a company making a profit or a loss then it is a real problem."
A year ago, De Montfort University started paying its staff the then level of £7.20, upping the wage of 130 employees.
Vice-chancellor Professor Dominic Shellard said: "Paying workers enough to provide their family with the essentials of life transcends partisan politics.
"It is a fundamental responsibility of an employer and something we are proud to uphold.
"I urge all employers not to wait but to introduce the living wage as soon as possible."
Academics from Loughborough University's Centre for Research in Social Policy worked on the proposals for yesterday's announcement.
Director Donald Hirsch said: "The important thing is that there is a general sense the minimum wage is not enough and people cannot get an acceptable living standard on it.
"Our research is based not on what experts think people need but on what members of the public tell us in great detail a family needs to make ends meet.
"That doesn't mean just survival, but what you need to participate in society.
"The problem is that even though wages are not going up generally, costs are going up – often faster than inflation."
