Minimum wage hike kicks in

Thousands of small businesses around the UK will see wage bills rise from today with the latest minimum wage increase.

The facts:

The ‘adult rate’ of the minimum wage has risen from £5.52 to £5.73 per hour, while the rate for 18-to-21 year-olds climbed 17p to £4.77. Sixteen and 17 year-olds get an extra 13p an hour at £3.53.

Britain’s low pay threshold has risen every year since its inception in 1999, in some years by more than 10 per cent. Despite protests from business leaders, ministers warn that failure to pay the new rate will be met with stiff penalties.

The minimum wage has increased by 59 per cent in the last nine years compared to a 44 per cent increase in average pay. The government says the increase has lead to a five per cent reduction in Britain’s gender pay gap.

Yesterday, the TUC called on the Low Pay Commission to ignore “employer scaremongering” and set a big increase in the minimum wage next year.

They said:

TUC general secretary Brendan Barber said: "The increase in the minimum wage will help thousands of families but the low-paid face a high inflation rate as they spend a much greater proportion of their income on food and energy where prices have rocketed.

"It is entirely predictable that some employer groups will say that the minimum wage increase will threaten jobs, yet it has helped millions without significant job losses.

"The credit crunch is very real - our members would tell us that," Jonathan Walmsley from the Federation of Small Businesses told the BBC. They are experiencing it with bank charges, energy cost rises, and there's now the possibility of water charges as well.

"The rise in the minimum wage is just an additional cost that they will incur, but they have to adhere to the law."
 
We say:

Setting low pay legislation is a balancing act that requires great sensitivity. It’s true that people in low pay jobs living in expensive parts of the UK struggle to make ends meet, but annually hiking the minimum wage at above inflation levels is only part of the solution.

No business group would dispute that the minimum wage must increase annually, but it should not be looked upon by ministers as an easy way to alleviate poverty in Britain’s big cities.

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By News Desk  on   Oct 01,2008

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Keywords

wages    money    cash-flow    shop    pay    remuneration    TUC    FSB    small business   

Comments

Paul
There is a real danger that some jobs may soon be over valued. Has anyone thought of that? Report Abuse