PRESS RELEASE 15 April 2002

Minimum Wage Increase

The Low Pay Unit welcomes any rise for the National Minimum Wage. For the approximate 1.5 million workers who receive the NMW as their hourly rate, having their earnings increased from such a low level can only be cause for celebration. It is, however, difficult to raise a cheer when today’s NMW rise insults the recipients both as workers and citizens.

The 10p an hour increase (an average £3.90 weekly rise) will do nothing to redress the massive imbalance between earnings, that looks set to widen even further without some long-term strategy to ensure even a modest sense of fairness in the workplace. There is, at present, neither a sign from the Government as to when the NMW rate will next be reviewed nor any indication as to what increase any future review will consider. This will only add to the insecurity felt by those surviving on low wages.

The Low Pay Unit calls on the Government to seek consultation on the raising of the NMW to a rate set at half-male median earnings (currently £5.38 per hour), and to the introduction of an indexed annual uprating system.

Dr Richard Towers, Director of the Low Pay Unit, said:
"A rise of 10p an hour on the minimum wage can hardly be put forward as a considered strategy for creating a more equal, stakeholder society. Compare this most modest of increases with the vast swelling of executive pay and perks packages, and the reality of UK plc is brought into sharp relief.

Furthermore, the goods and services provided by low wage workers in cleaning, catering, tourism and leisure are consumed disproportionately by those well up the earnings league. These higher earners are buying their pleasures on the cheap whilst the well-meaning initiatives of the Chancellor effectively translate into using taxpayers’ money to subsidise the income of people who work for employers paying poverty wages.

For further information contact:
Richard Towers, LPU, on 0207-435-4268