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