Dr John Sentamu said "years of stagnant, and even falling, wages" had left people not receiving a fair day's pay.
"Wages have been stubbornly clinging to the legal floor around the minimum wage for far too long," he wrote in the Observer newspaper.
His article was published as a new study revealed almost six million workers are paid less than the voluntary national living wage.
The figure represents 23% of all employees, up by 1% over the past year, the research by professional services firm KPMG found.
The report was published ahead of new figures being published on Monday for the hourly rate, which are expected to show an increase from the current £7.85 an hour and £9.15 in London.
The current figures are well above the national minimum wage and more than the new living wage of £7.20 an hour for over 25-year-olds the Government has announced will come into force next April.
KPMG said its research revealed that the proportion of workers earning less than the voluntary living wage had risen for three years in a row.
The data also showed a "worrying trend" of part-time, female and young workers being most likely to earn below the figure.
Archbishop John said: "As a Christian, I'm often asked to explain the moral case for paying the living wage and why we should take seriously these words of Jesus Christ: 'The worker deserves their wages.'
"He treated people with respect and we must do the same. Yet it would be naive of me to expect businesses to simply follow their hearts; the beauty of the living wage is that, while it is rooted in the social teachings of many religions, it also makes good business sense.
"When the living wage is introduced by employers, everyone gains. Morale goes up. When work feels worthwhile because it's more than a drudge, its quality improves.
"Raising pay to a living wage would boost the economy by stepping up workers' spending power. They would also be paying more tax, putting more money into the pot for health and education. Doing what is right also pays incalculable dividends."
He added: "Addressing these issues will help reduce the need for people on low incomes to rely so heavily on tax credits and housing benefit to maintain a decent living standard.
"Income inequality is the ogre of our time, which we must slay. The living wage is a crucial tool in our armoury."