Financial News
- 17 April 2012, 15:20
Report: UK Basic Wage Lower Than In 2004
The national minimum wage for British workers is set to be lower for workers in real terms than it was nearly a decade ago, according to a new report.
Even after it is increased later this year inflation means it will be worth less than it did in 2004, a think tank has claimed.
The Resolution Foundation said October's planned 11p an hour rise to £6.19 was the third successive below inflation increase.
The report, written by Professor Alan Manning of the London School of Economics, said that while recent caution on increases was justified, the impact of the minimum wage had now "stalled".
The value of the statutory rate had "flatlined" to just over 50% of median earnings, compared with 60% in other countries including France.
Resolution Foundation senior analyst James Plunkett said: "After 13 years of detailed studies into its impact, the benefits of the national minimum wage are now beyond doubt.
"It has boosted wages for some of the poorest paid people in the country and helped to make sure work pays, without causing job losses.
"The question now is what role it can play in the future to raise living standards even further."
Professor Manning added: "The minimum wage is one of the most popular policies of modern times but in some sense it's been a victim of its own success.
"Given the scale of the challenge now facing living standards, it might be time to think about more radical options for reform.
"For example, we could consider introducing a higher minimum wage for workers aged over 30 who are more likely to have families to support, or for London and the South East.
"We could also do more to show that big companies in some sectors could afford to pay more than the legal minimum."
A spokesman for the Department for Business, Innovation and Skills said: "It is important that we have a national minimum wage that provides the necessary protection for the lowest paid workers, while at the same time not pricing people out of the labour market.
"The rates are recommended to Government each year by the independent Low Pay Commission (LPC) who base their analysis on extensive evidence and a thorough consultation process."
:: The LPC lists the 2004 minimum adult hourly rate as £4.85
what do you think?
simon calvert
The minimum wage should be set at a level that a person can sustain their life at a credible level, it does not matter if your job is unskilled, people still need a fair wage for the effort put in.. If you work full or part time time this should reflect that. Greed by execs and employers is the only thing standing in the way..no amount of economic bamboozling can take away the right for a fair wage. It is a very simple equation...if we need to pay the lower workers more the top earners must be paid less...very simple and only the greedy will disagree.!
m_v_bridgman
Could not of said much better myself. I was made redundant in February even though the company I was working for is making more than ever. The top men didn't want to take a pay cut so they Damn near destroyed the lives of me, my fiancee and my 2 young children, not to mention the other 15 or so throughout the group. But like you say, the greedy won't see it like that.
simon calvert
Mv.....very sorry to hear of your plight...it is unfortunately the world we live in at the moment where people think it's their right to live the life if Riley off other peoples sweat and toil while they live on the breadline barely able to cope.then everyone is fed the rhetoric that it wouldn't be economically viable to pay these people more as the cost of living would go up...well it would only go up if the greedy got more greedy and felt that they should have a pay rise because the lower wage earners money had gone up...this is the reality...if the man at the bottom can now afford to take his family on holiday then the man at the top should be able to double his according to his way of thinking..he can't be happy with what he has..it has nothing to do with parity or fairness it is just somebody thinking they are entitled to more due to plain greed.
Richard Maitland
David Plunkett says,"The minium wage has helped to make sure work pays". At £12,875.20 a year @40hrs per week before tax and N.I. that is still below what a person can receive on benefits. How do these people expect anyone to work for that. Get up every day, travel to a job they probably do not like, working for a greedy slave driving boss. It's no wonder people prefer unemployment.
Richard Maitland
The minium wage was originally brought in to protect part time workers, waitresses and the like, while unions fought for fair wages for most others. With the demise of the unions in the private sector, employers hijacked the minimum wage as a standard from which to work out pay scales. Most only pay at the lowest they can. The LPC lists the adult hourly rate at £4.85 in 2004. They now agree that £6.19 is to be the new rate. That is a rise of £1.34 an hour over the last eight years. They are not being realistic. How can a family live on this kind of wage?
simon calvert
Exactly...the minimum wage should be enough to...pay a mortgage, clothes, food power, outings, holiday, council tax, two kids, car, insurance, tax,etc..it should be about 25kmin....the high earners must take the hit...then guess what the economy becomes stronger as more people can afford a few luxuries.....they can then employ a part time gardener, not just a rich person....east eh....but that's not what the big earners want you to know is it!!
john
But the rich get richer.
Jonathan Goodwin-Self
The State pension has been increased by 5.2% = £5.30. Gas and elecricity and food and everything peope buy has increased by a minimum of 30% in the last 12 months but the ONS which is run by idiots says that inflation on CPI has only increased by 0.1% because they have cut a load of things from their inflation materials. They are now as bad as the Chancellor, Treasury and Mervyn King. They are lying about everything.
Name witheld
This comment has been removed for violations of our Terms and Conditions.
stewgwyn
10:22am on 17/4/2012
Do we need a bloody ''think tank'' to tell us that? It's partly because of these self-appointed bodies of professional work -avoiders that we're in the stilton!