PRESS RELEASE 17 December 1998

Employers ill prepared for the minimum wage

Three months before the National minimum wage comes into force, Low Pay Unit research shows employers in the North East - the lowest paid region in the country - are ill prepared for its introduction.

The report, 'Due North - the impact of the minimum wage in the North East of England' finds that:

• Up to 130,000 people (14 per cent) of employees in the North East, should receive a pay rise in April 1999, compared to 5 per cent in London and around 8 per cent for the UK.
• At least 8 per cent of employed men and 18 per cent of employed women in the region stand to gain, including more than one in four part time workers.
• Service workers in the region, whose pay is the furthest behind the rest of the country, will benefit significantly. A fifth of workers in the distribution, hotel and catering sector will qualify for higher pay, and almost a third of employees in services like security and dry-cleaning.

The research which also looked at 470 jobs advertised in the four Jobcentres in the North East (Newcastle, Gateshead, Stockton-on-Tees and Morpeth) found that

• More than half of the jobs surveyed offered pay below £3.60 per hour. In Newcastle and Gateshead, two thirds of the jobs were below this level.
• 95 per cent of jobs in security and hotel and bar work fell below the minimum
• A number of jobs were advertised with pay below £2.00 per hour - for example a job as a security guard in Newcastle paying £1.85 per hour with an 80 hour week, and a second year hair stylist at £1.62 per hour.

Nick Burkitt, author of the report, said:
"The minimum wage could help improve the incomes of people in the North East, currently around 15 per cent below the national average. Low paid jobs in the region should see an average pay rise of 16 per cent."

Bharti Patel, Director of the Low Pay Unit, said:
"The National Minimum Wage set by the government at £3.60 an hour is an absolute minimum level and employers in the region should already be paying this. Most decent employers already pay above this rate. Decent pay is crucial/vital to increasing productivity, and stimulating the local economy."

For further information call Bharti Patel, Director or Nick Burkitt, Researcher on: 0171 713 7616 or 07887 643750 (mobile)