Low-paid city workers could be paid a "living wage" which is significantly higher than the legal minimum.

Leicester's mayor Sir Peter Soulsby has ordered council officers to try to calculate the basic pay people should receive.

While the minimum wage – £5.93 an hour – is enforceable by law the living wage is not and it would be up to the council to persuade businesses to agree to pay a higher amount.

A living wage is the minimum amount a person needs to earn to meet basic needs such as food, housing, health care and recreation and is based on the cost of living in a particular area. In London, it is £8.30 an hour.

Sir Peter said: "We think that we can help people in the city by encouraging businesses to commit to raising their levels of pay.

"It wouldn't just improve the lives of low-paid individuals, it would boost the local economy.

"The council will have to lead by example.

"We have to be realistic, though. This is a long-term plan and it won't happen overnight."

Many catering, administrative and cleaning jobs advertised in Leicester pay the minimum wage.

Wayne Griffin, 20, of Highfields, is looking for work in the catering industry.

He said: "Most of the work around is minimum wage and it's not possible to live on that kind of money.

"A living wage would make life easier for a lot of people, including me.

Lisa Nightingale, 32, of Beaumont Leys, who works in administration, said: "The cost of living is going up all the time. The minimum wage is far too low to keep up."

Martin Traynor, chief executive of Leicester Chamber of Commerce, said with the economy still coming out of recession "any implementation of the living wage must be a medium to long-term goal".

Jaspal Singh Minhas, president of Leicester Asian Business Association, said: "The devil is going to be in the detail of the proposition.

"The last thing small businesses – in fact, any businesses – need, is a layer of bureaucracy that monitors wage levels."

One manager of a city centre branch of a national fashion chain said the proposal was unlikely to gain much support from the company.

The woman, who did not wish to be named, said: "I can't see why any firm would voluntarily increase its outgoings like this."

However, many firms in London do adhere to the living wage for all staff. They include Deloitte, Nomura, Prudential and Standard Chartered.