From the TUC

Minimum wage increase certainly worth a cheer or two

29 Sep 2011, by in Labour market, Uncategorized, Working Life

The National Minimum Wage (NMW) rates will increase again on Saturday 1 October. We have strong arguments for a more generous increase, especially in these time of relatively high inflation, but we should perhaps also just take a moment to celebrate the fact that every increase that has been achieved has been fought for by the trade union movement. The Low Pay Commission (LPC) estimates that the latest rise will benefit around 890,000 employees – certainly worth a quick cheer.

The rise will put a bit of extra cash in the pockets of the UK’s lowest-paid workers at a time when they are feeling very squeezed, which is worth a cheer,but the increase will have to be bolder next year.

NMW rates from October 2011

 

Current rate

Oct 2011

Adults

£5.93

£6.08

18 to 20-year-olds

£4.92

£4.98

16 and 17-year-olds

£3.64

£3.68

Apprentice rate (under the age of 19 plus older apprentices in the first year of their course)

£2.50

£2.60

Cuts in public services and benefits are hitting the working poor the hardest and this increase is not enough to protect them from falling living standards.

An increase that is set at the highest level possible without causing net job losses would push more money into the economy, as research suggests that minimum wage workers spend 100 per cent of any rate increases.

The LPC also says that the latest increase should benefit the public finances by £230 million as tax and national insurance rates increase and the benefits bill falls. It is important that employers pay their share at a time we are fighting cuts in public finances.

Its also worth who gets the National Minimum Wage, as this helps us to see that it has so far been a socially progressive instrument – and we believe that there is still more potential to be fulfilled.

Minimum Wage employee jobs 2010

Employee group

Index of NMW incidence

Employee group

Index of NMW incidence

Men

0.71

Ethnic minorities

1.40

All employees of working age

1.00

Migrant workers

1.40

Women

1.23

Young workers aged 18-24

1.56

Young workers aged 16-17

1.35

Workers with no qualifications

3.01

Derived from LPC report 2011, p22, fig 2.5. Based on LFS figures.

NMW jobs by location 2010

location

Percent employee jobs NMW

location

Percent employee jobs NMW

Northern Ireland

6.4

UK

4.2

North East

5.9

England

4.1

North West

5.3

Eastern

4.0

East Midlands

5.2

Scotland

3.9

West Midlands

5.2

South West

3.8

Wales 

5.1

South East

3.1

Yorks and Humber

4.8

London

2.2

Source: LPC report 2010, p21

Number and proportion of NMW jobs by industry

industry

Number of NMW jobs (thousands)

Industry

Per cent paid NMW

Non-low paying industries

303

Hairdressing

28%

hospitality

245

Cleaning

23%

Retail

231

Hospitality

20%

Cleaning

64

childcare

13%

Social care

58

Employment agencies

11%

Employment agencies

51

Leisure travel and sport

10%

Leisure travel and sport

40

Textiles

10%

Hairdressing

24

Retail

8%

Food processing

23

Social care

7%

childcare

18

Agriculture

7&

agriculture

8

Food processing

6%

textiles

7

security

5%

security

5

Non low-paying industries

2%

Derived from LPC report 2010, table 2.2.