Sheffield is Britain's "low pay capital" with hourly rates 10 per cent below the national average, a study has found.
A typical full-time worker in the city suffers a "pay penalty" of £1,750 a year, partly due to low productivity, think tank the Resolution Foundation said.
The region has a high concentration of large, low paying sectors such as office administration and retail, and typical hourly pay in these sectors is lower than the UK average
Legal and political disputes look set to delay, or even kill off, the Sheffield mayoral election and extra powers over economic policies like housing and transport associated with devolution, said the report.
Stephen Clarke, policy analyst at the Resolution Foundation, said: "Sheffield city region is at a crossroads. There is a real risk that no devolution deal plays out and its status as Britain's low pay capital continues.
"Unless the current legal and political issues can be resolved, the area risks losing out on extra powers over crucial policies like housing and transport, not to mention much-needed strong economic leadership to strengthen the region's economy."