PRESS RELEASE 17 June 1998

At last - a minimum wage for the UK

The Low Pay Unit welcomes the Government's announcement today on the establishment of the UK's first ever national minimum wage system, but pledged to continue campaigning for a minimum wage set at a decent level.

Bharti Patel, Director of the Low Pay Unit, said today:
"A minimum wage represents a vital first step, alongside improved employment rights, towards a fairer and more prosperous society. It will send a message to cowboy employers that sweatshop economics is at an end."

The Unit believes that the introductory level of £3.60 for adults should be brought up to at least half median male earnings - currently £4.61 an hour. This would help six million employees, the Unit argues, and would add just 1.5 per cent to the nation's pay bill. It would have a decisive impact on poverty, discrimination and inequality at work. Bharti Patel continued:

"Most good employers already pay a wage at this level or above, and there is a danger that they could be undercut by minimum wage firms operating at the much lower level proposed by the government."

The Unit is very concerned by the proposals to exempt 16-18 year olds from wage protection and for a lower rate for young adults up to the age of 21. The Low Pay Commission proposed a lower rate for 18-21 year olds of £3.20. The government has insisted on an even less, starting at £3 an hour in April 1999.

"The Low Pay Commission's proposals are already very modest," said Ms Patel. "The government's decision to reduce this even further is disappointing. We understand that the government wishes to tackle youth unemployment and seems to have made a good start with the New Deal. We do not believe, however, that paying young people the full minimum wage will adversely affect this."

During the 1990s, young people's earnings declined relative to older workers and their employment position worsened. There is no evidence to suggest that paying them less would have significantly improved their chances of getting a job.

For further information call Bharti Patel, Catherine O'Donnell or Sarah Roche on 0171 713 7616 or 0973 738 462 (mobile).