The New Economics Foundation think-tank (nef) said its study showed one in four local authority employees was on low wages.
Outsourcing of work from the public sector to private firms was driving down pay, said the report. Part-time workers and women employees were disproportionately affected by low pay, including dinner ladies, school patrol staff and those in health and social care, the study of official statistics found.
Pay freezes in recent years, coupled with the rising cost of living, means public sector workers are on average £2000 worse off than in 2010, while part-time hourly earnings are worth the same as a decade ago, said nef.
The research showed 500,000 low-wage workers are now employed by public service outsourcing companies.