Low Pay Thresholds 2001/02

"The right to a fair renumeration" has been established as a fundamental right under the European Social Charter (to which the UK is a signatory). Article 23 of the UN Universal Declaration of Human rights states that "Everyone who works has the right to just and favourable renumeration ensuring.... an existence worthy of human dignity".

What constitutes low pay is not a fixed monetary measure but is defined in relation to the level of earnings in a country and the level of income that is deemed necessary to provide for a household's basic needs.

Low Pay Unit's threshold: £7.41 per hour

This represents 2/3 male median earnings (the median is the point at which half earn above and half below) calculated:

• £420.00 (median gross weekly earnings for men) x 2/3 = £280.00 per week
• £280.00 divided by 37.8 (average hours worked by all full-timers, excluding overtime hours) = £7.41 per hour

The current NMW rate represents 37.8 per cent of male median earnings. The Low Pay Unit is campaigning for a figure equivalent to half male median earnings. Once this achieved, successive increases would be recommended to bring it closer to two-thirds male median earnings. (Click here for details of the formula.)

Recommended rate for minimum wage: £5.55 per hour

This represents half male median earnings, calculated:

• £420.00 (median gross weekly earnings for men) divided by 2 = £210.00 per week
• £210.00 divided by 37.8 (average hours worked by all full-timers, excluding overtime hours) = £5.55 per hour

Source: Low Pay Unit's calculations based on New Earnings Survey 2002

(This page was last amended in December 2002)