I spent a chilly morning with Andrew "Whitey" White – guitarist with The Kaiser Chiefs – student leaders, Leeds Labour councillors, trade union representatives, faith groups and representatives of the Fair Pay Network, launching a campaign to make Leeds a "Fair Pay City". What does this actually mean? What is fair pay and why wouldn't Leeds citizens be receiving it already?

The minimum wage, introduced by Labour and increased again recently, has transformed the lives of many of our citizens. But, despite this commitment to social justice, it is plainly not enough to avoid poverty and provide for a family.

If you look at the national picture, you begin to look at the situation in Leeds through a different prism. At a time when pay rates at the top of the labour market have become quite obscene and the Government's insistence – quite rightly in my view – that work is the main route out of poverty has never been stronger, 57 per cent of poor households are working households, up from under a half a decade ago.

Furthermore, 64 per cent of low-paid workers in Britain are women. Poverty in Britain has a largely female face, and we have the greatest gender pay gap in the EU.

The high rates of female low-pay contribute to the fact that a woman in Britain has a 14 per cent higher chance of being in poverty than her male equivalent. That's our mothers and sisters caring for the elderly in the social care sector; a fast growing sector in Leeds, or cleaning the corporate offices and flats that are springing up at a rate of knots in and around the city.

Despite the huge developments of the last decade, 149,000 people in Leeds are designated as deprived. Furthermore, 24,000 workers in the Yorkshire and Humber region are known by Westminster not to be receiving even a minimum wage, which is a legal requirement.

This does not include an unquantifiable number of temporary and agency workers, many of them migrant workers, employed on varying contracts – or none at all.

According to recent data, the highest paid 10 per cent of workers in Leeds receive a gross average of £775 weekly. Contrast that with the lowest paid 10 per cent receiving just £121 per week. Astonishingly, the lowest paid women in Leeds are receiving on average just £84 per week. The huge difference between the haves and the have-nots begins to look startling and keep in mind; this is just the working poor, not the jobless.

So what can be done? The Labour group on Leeds City Council is about to table a motion which if successful will bind the council to making Leeds a "Living Wage City" and will also guarantee decent terms and conditions, holiday and sick pay included, for many more hardworking people.

This also means anyone employed directly or indirectly by the council would receive an hourly figure, set by a low pay unit with the council, over and above the minimum wage, which means that they are able to eat, clothe and support their families without having recourse to three jobs or falling into the spiral of personal debt.

The presidents of both student unions in Leeds Metropolitan and Leeds universities are about to meet their vice-chancellors to begin discussions on how the university campuses, including all cleaners and security staff, can be made living wage zones. Then it is down to all of us to ensure our city really does become the UK's first living wage city. We have stiff competition from London and Oxford, both of whom are taking similar initiatives. They understand that profound wage inequality costs all in the community in the long run.

But is this sustainable commercially? Don't ask me. Ask Duncan Mycock, a senior partner of KPMG in Leeds which is one of the largest professional service firms in the world.

Speaking about the Fair Pay launch, he said: "We have found that paying the Living Wage is a smart business move as increasing wages has reduced staff turnover and absenteeism, whilst productivity and professionalism has increased."

In other words, a fair day's pay for an honest day's work. That surely isn't too much to ask for, is it?

Colin Burgon is the Labour MP for Elmet.