Minimum wage

ePolitix.com Stakeholders comment on news that the minimum wage is to rise 17p to £5.52 an hour.

Government Response:

Trade and industry secretary Alistair Darling said: "The increase, recommended by the independent Low Pay Commission, would mean the minimum wage had gone up by almost 30 per cent more than inflation since 1999.

"Just 10 years ago home workers could be paid as little as 35p an hour, cleaners £1.30 an hour and security guards £2.25 an hour, which was bad for families and just plain wrong.

"I am proud of the minimum wage, proud of how it is helping families and proud of the role it plays in the modern economy we are delivering."

 

Party Response: Liberal Democrats

Trade and industry spokesman Susan Kramer said: "This decision will create an even bigger income gap between younger workers and the rest.

"Workers aged under 22 deserve to be paid the same as their older colleagues."

 

Stakeholder Response: CIPD

To comment to CIPD click here

John Philpott, chief economist at CIPD, said: "The settlement will disappoint low paid workers and anti-poverty campaigners but is a sensible decision following several years of substantial real and relative hikes in the minimum rate.

"The common good requires a NMW that ensures low paid workers share in growing prosperity without at the same time threatening the jobs that provide them with a livelihood.

"The Low Pay Commission has served to strike a fair balance on the ‘low pay or no pay’ spectrum, since 1999 and today’s recommendation is no different.

"Growth in the NMW has easily outstripped both price and average wage inflation throughout this decade.

"A cautious increase this year at (if not slightly below) growth in average pay, and in line with what price inflation will probably be come the autumn, seems sensible.

"With the NMW now starting to bite, especially for younger workers, a period of caution is fully justified if jobs are not to be put at risk.

"The government is therefore also right to be doubly cautious in not extending the full adult NMW rate to 21-year-olds.

"This will disappoint many, particular 18 to 21-year-olds and 16 to 17-year-olds who will see their hourly pay rise by just 15p and 10p respectively.

"But if the NMW is to succeed as a long-term policy instrument it must be set at a rate that while improving pay at the bottom of the labour market does not have adverse consequences for jobs, inflation and the wider economy."

 

Stakeholder Response: GMB

To comment to GMB click here

Paul Kenny, GMB general secretary, said: "Over 1.3 million workers who are on the National Minimum Wage in the UK will get an extra 17 pence per hour from 1st October this year taking the new hourly rate for adults to £5.52.

"This increase is welcome. However, the figure of £5.52 is still well short of half of the UK average hourly rate for full time workers.

"GMB is increasingly concerned about enforcement of the National Minimum Wage

"Workers who are not currently receiving £5.35 per hour should contact their local GMB office for help to get their rights."

Stakeholder Response: Carers UK

To comment to Carers UK click here

"Carers UK welcomes the increase in the minimum wage which will help to combat poverty for those on low incomes, many of whom are carers, looking after elderly, sick or disabled relatives, partners or friends.   

"The new research published by Carers UK from Leeds University as part of our work on carers and employment found that carers tended to be clustered in lower wage occupations.

"However, the rise in the minimum wage also opens up a whole new dilemma and demonstrates how one part of government policy acts against one another to leave carers caught, worse off, between the two. 

"The minimum wage rises in October but the earnings limit for the main carers benefit, Carer's Allowance, does not increase until April.  So, for all those now working for 16 hours or more, they are put in a double bind. 

"Carers go over the earnings limit and lose 100% of their Carer's Allowance worth nearly £47 (at current rates) per week, or they drop their hours and lose Tax Credits.  

"Either way, carers are worse off until the earnings limit rises again in April.  And, when the minimum wage rate rises again in October, the same problem will occur, year in, year out with carers yo-yo-ing on and off benefit or on and off tax credits.  

"Apart from the additional administration being borne by Government departments as a result of this, including making state pensions calculations more complicated in the future, it places undue stress on carers.

"This is a prime target for a bit of joined-up Government thinking at part of the their newly announced review of the National Strategy for Carers.  

"Carers UK hopes that the Government will seize the opportunity to review this and other complications with Carer's Allowance and other aspects of income for carers."

Stakeholder Response: BRC

To comment to BRC click here

"The BRC is the only business organisation that has consistently argued for no real-terms increase in minimum wage costs and backed that up with detailed evidence which, we believe, impressed the Low Pay Commission. 

"The 17 pence increase in the National Minimum Wage (NMW) is good news for hard pressed retailers who feared another inflation-busting increase this year.

"Retailers have had to cope with a £2.7 billion hike in wage bills caused by the previous two above-inflation increases. Our survey has shown that between 2005 and 2006 78,000 retail jobs were lost. 

"While we are of course relieved that the LPC have listened to our evidence and taken our recommendations on board, we remain concerned that the minimum wage remains unpredictable.

"The BRC believes that this now needs to be addressed as a matter of urgency – in order that businesses have sufficient time to prepare for wage increases and budget accordingly.

"The BRC believes there should be no real-terms increase next year either while the Commission reviews the future direction of the minimum wage and produces, what we hope will be, a more predictable formula for future changes.

"The BRC will be contributing some constructive and practical ideas to this review."