The TUC said between 80,000 and 90,000 people were taking part in a march and rally in Hyde Park, central London, under the banner Britain Needs a Pay Rise.
The hashtag #BritainNeedsAPayrise was trending on Twitter as the march took place, with smaller demonstrations held in Glasgow and Belfast at the same time.
The protest follows industrial action by public sector workers, including the first ever strike by midwives, who are angy at the government’s refusal not to award a recommended 1 per cent pay increase to all NHS staff.
TUC General Secretary Frances O’Grady and other union leaders posed with a giant 175 figure. The organisation says the average British chief executive earns 175 times as much as the average worker.
Ms O’Grady said: “Our message is that after the longest and deepest pay squeeze in recorded history, it’s time to end the lock-out that has kept the vast majority from sharing in the economic recovery.
“The average worker is £50 a week worse off than in 2007 and five million earn less than the living wage. Meanwhile, top directors now earn 175 times more than the average worker.
“If politicians wonder why so many feel excluded from the democratic process, they should start with bread-and-butter living standards.”
Len McCluskey, general secretary of Unite, called on Labour to offer a “clear socialist alternative” to the coalition policy of austerity at the next election.
He said: “I say to Labour – stop being scared of your own shadow. Don’t shrink what you offer the British people.
“The time for being timid is past. Be brave, be inspired by this march today.
“Believe that people power and working class movements can change our country for the better.”
Dave Prentis, general secretary of Unison, said 600 public sector jobs had been lost every day since the coalition came to power.
He added: “We have a story of two nations – one where champagne corks are popping for the bankers and boardroom pay is soaring, while in the other world our people are suffering from poverty pay.”