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wagdate: 31 March 2009

embargo: 00.01hrs Wednesday 1 April 2009

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.

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, 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.

TUC General Secretary Brendan Barber 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 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.'

NOTES TO EDITORS:

- The NMW was introduced on 1 April 1999. The adult NMW is currently £5.73 an hour. Workers aged 18-22 receive £4.77 and those aged 16 and 17 get £3.53.

- From 6 April 2009, every employer caught underpaying their workers will have to pay a penalty of between £100 and £5,000, based on the amount that they owe their workers. This will be on top of the money that they owe to their workers, which will also have to be paid. Fines for those who persistently cheat their employees will also increase, since the current £5,000 cap will be replaced with the power to impose unlimited fines.

- All TUC press releases can be found at www.tuc.org.uk

- Register for the TUC's press extranet: a service exclusive to journalists wanting to access pre-embargo releases and reports from the TUC. Visit www.tuc.org.uk/pressextranet

Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Brenchley T: 020 7467 1337 M: 07900 910624 E: ebrenchley@tuc.org.uk

Press release (700 words) issued 1 Apr 2009