PRESS RELEASE 6 March 2001

Minimum Wage increase welcome, but overdue

The Low Pay Unit today welcomed the announcement by Trade and Industry Secretary Stephen Byers of an increase in the minimum wage to £4.10 from October. Around 1 million workers are expected to benefit, two thirds of whom are women. This will be the second increase in the minimum wage since it was introduced in April 1999, and will maintain the level of the minimum wage at around 38% of average earnings.

The Government originally intended that the minimum wage should cover 2 million workers, but an over cautious approach to setting the initial level meant that only around 1.2 million actually benefited. It will require a much more substantial increase to reach the Government’s original aim. The Low Pay Unit argues that the minimum wage should be set at half male median earnings or £5.11 per hour.

Bharti Patel, Director of the Low Pay Unit, said:
"This increase is good news for the million workers affected but is long overdue and only maintains the level of their pay in relation to average earnings. To begin to close the gap between the highest and lowest paid, and with it the gender pay gap, would require a more substantial increase."

For further information, contact Bharti Patel on 020 7435 4268