*Update: There have been confirmations that the glitch still works when the patch has been removed. However, there are reports that progress towards the People's Person achievement is being lost after clearing your cache and removing the update. Therefore it is advisable to unlock the People's Person achievement if you have any progress towards that before doing this.*
*Update: There are reports that the recent update has patched this glitch. However, if you clear your cache (Go in to System Settings on the dashboard, click Memory, press Y on your storage device and click Clear System Cache), you can perform the glitch while offline. Just connect again right before you reach Level 50 if you want to have the time stamp*
In Act 1, as you are driving along the road you will find a survivor behind a fence, in front of his hut.
Kill the zombies and start the side quest; "Make Yourself At Home".
(A few people are having difficulty spawning this quest. I can confirm that the quest will be available when Sinamoi sends you to the Hotel Garage to find the truck. Another member has confirmed the quest is available as early as the quest; "Seek 'N' Loot", where Sinamoi requests that you find 2 crates of Juice. Both of these quests are very early on, which makes starting a new character less of a chore.)
You will have to get inside the hut where you will find a Thug. This Thug has not been programmed to attack and will sit there as you batter him.
Get a set of knuckle dusters and hit a zombie until they are "broken". Go to the Thug and hit his arm with a blunt weapon to break it.
Switch back to the knuckle dusters and start hitting his broken arm. If you hit it right (it helps to let the sticky aim lock on to his shoulder), you will get an XP bonus. Keep doing this over and over until he's almost dead, then reload your checkpoint and repeat the method.
It shouldn't take too long to get to Level 50, once you get into a routine.
Note; You can make this go even faster if you are using Sam B, as he has a multiplier that goes up to 4x in his Survival Skill set, which is for breaking bones. However, this ability is in the 5th tier of the skill set, so you will have to be around Level 30 to unlock it.
This video will show you exactly how to do it, if a visual description would help you further;
EDIT: Credit for the video goes to Nvoy123
EDIT 2: Jammy32 has posted another solution, which has additional information about the Thug and using Sam B to farm the XP. As I do not want to take his information, please use his solution alongside this one, for optimal results. Thank you.