Tenth anniversary of the minimum wage proves critics wrong

Critics of the national minimum wage (NMW) who warned its introduction would destroy jobs have been proved wrong says the TUC, as the minimum wage celebrates its tenth anniversary today (Wednesday).

When the Government introduced the NMW in 1999 the business lobby warned that it would be a disaster and that thousands of jobs would be lost. However, before the current recession hit home, employment had grown by about two million jobs in the period since the introduction of the NMW, says the TUC.

The adult minimum wage was originally set at £3.60 per hour. The current figure is £5.73, which is an increase of almost 60 per cent in less than a decade. Over the same period the Retail Price Index (RPI) has risen by 33 per cent and average earnings 35 per cent, so the NMW has delivered a real increase in the spending power and living standards of the low paid in the Midlands.

Each time the minimum wage has been increased, it has led to more than a million vulnerable workers getting a pay rise. Women workers, workers from ethnic minority backgrounds, those with disabilities, and younger and older workers are among the groups who have benefitted most in the midlands, says the TUC.

The minimum wage has also had a positive impact on closing the gender pay gap. The NMW benefits five per cent of employees, and the gender pay gap for this group of workers has narrowed from 10.5 per cent in 1998 to 3.8 per cent in 2007. The gender pay gap for all employers is currently 17.1 per cent.

However the TUC believes there is still more to do. The TUC wants to see the NMW adult rate paid to 18 year olds – it is currently only paid from the age of 22 – and the exemption from the NMW for apprentices to be replaced with a special rate in order to protect vulnerable young people.

Midlands TUC Regional Secretary Roger McKenzie said: “The minimum wage is one of this Government’s greatest successes.

“It is an integral part of building a fairer Britain, and its success has shown that despite scare-mongering from business, the midlands economy can easily cope with sensible labour market regulation. Indeed, our current economic woes seem to be caused by too little regulation rather than too much.

“If we want to build a strong UK economy that is fair to all its citizens then we must continue to develop the minimum wage during the coming decade.

“Employers are wrong to call for a minimum wage freeze this year. Raising the minimum wage has already helped hundreds of thousands of families without causing significant job losses.

“The recession was caused by very highly paid people damaging the nation’s financial system. It would not be fair to make the low paid suffer a wage freeze while city bankers still get bonuses, and when there is no economic necessity to do so.”