Minimal increase in NMW
Labour & European Law Review Weekly Issue 390 08 October 2014
The government estimates that over one million adults will benefit from the increase in the National Minimum Wage (NMW) that came into effect last week. According to the TUC, 60 per cent of them will be women.
From 1 October 2014, the national minimum wage rates are as follows:
- £6.50 per hour for adults, representing an increase of three per cent on the previous rate of £6.31 per hour
- £5.13 per hour for 18 to 20-year-olds, representing a two per cent increase on the previ-ous rate of £5.03 per hour
- £3.79 per hour for 16 to 17-year-olds, representing an increase of two per cent on the previous rate of £3.72 per hour
- £2.73 per hour for apprentices, representing a two per cent increase on the previous rate of £2.68 per hour.
- However, a report from the Work Foundation earlier in the year (weekly LELR 379) made clear that there is little to celebrate about an increase in the rates. Instead it
- found that introducing the NMW has not resolved the issue of low pay because the rate has remained below the low pay threshold and has had limited “ripple” effects further up the wage distribution.
TUC General Secretary Frances O’Grady made a similar point when she said: “It is good news to see the worst paid adult workers receiving a pay release above inflation for the first time for six years. But it’s a muted celebration because the minimum wage would be worth at least £7 today had it kept up with rising prices.
“Politicians from all parties and many business leaders now agree that the minimum wage should increase far more rapidly. Britain needs a pay rise and a wages-led recovery is the best chance we have of sustaining economic growth and restoring living stand-ards.”
Neil Todd from Thompsons Solicitors commented: “Any increase in the National Minimum Wage is welcome, particularly at a time when working people continue to struggle in the current economic environment. However the Living Wage Foundation argues very per-suasively that these increases are not enough to provide “a basic but acceptable standard of living” and therefore many working people on these wages are still likely to continue to struggle to adequately provide for both themselves and their families.”
Workers who are concerned that they are not being paid the correct rate should contact the government’s Pay and Work Rights Helpline, which enforces the NMW. It is available online at: https://www.gov.uk/pay-and-work-rights-helpline or by ringing 0800 917 2368.