Minimum wage rise will benefit 950,000 workers, says TUC

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date: 29 September 2010

embargo: 00.01hrs Friday 1 October 2010

Nearly one million workers will benefit when the adult national minimum wage (NMW) increases by 13p to £5.93 per hour today (Friday) says the TUC.

Two in three of the 950,000 beneficiaries will be women, reinforcing the NMW's positive role in narrowing the gender pay gap.

And from today all apprentices will also be protected under NMW legislation with a new hourly rate of £2.50 for those who were previously exempt.

Also - following a TUC campaign - the age threshold for paying the adult rate will now be reduced from 22 to age 21, which will give the 50,000 21-year-olds who are currently paid below the adult rate a pay increase of 20.3 per cent.

The Low Pay Commission (LPC) calculates that this 2.2 per cent increase in the adult minimum wage should benefit the public finances by over £238 million. This is because from today workers in receipt of the NMW will be paying £101 million more in income tax and £53 million in national insurance. The increase will also save the Government £84 million in tax credits and in-work benefits, important at a time when the public finances are being cut, says the TUC.

TUC General Secretary Brendan Barber said: 'This increase will put extra cash in the pockets of some of the UK's lowest paid workers and today there are also significant gains for apprentices and young workers.

'The minimum wage has already helped hundreds of thousands of families without any negative side effects and its success has shown that - despite scare-mongering from some business voices - 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.'

Commenting on Government plans to name and shame employers who flout the minimum wage, Brendan Barber added: 'The decision to list publically employers who flout national minimum wage laws is the correct one.

'We need to see more rogue employers named and shamed in order to act as a deterrent.'

NOTES TO EDITORS:

- The 950,000 figure is from a range of estimates - published by the LPC - for the number of low paid workers benefitting from the 2010 increase in the NMW (LPC Report 2010). The TUC's assumption is that the earnings of low paid workers will broadly follow the average growth in wages rather than current inflation rates.

- Prior to 1 October apprentices in England should have been paid at least £95 per week under the Government's contractual minimum funding guarantee. But this was not robustly enforced, and this guarantee did not apply to Scotland, Wales or Northern Ireland.

- Apprenticeships in new sectors such as business administration, social care and retail are often much shorter than those in the more traditional manufacturing sectors, ranging between six months to two years in length. Therefore an exemption from the NMW for the first year of the apprenticeship is no longer deemed appropriate.

- The minimum wage is enforced by the Government. Phone the Pay and Work Rights Helpline on 0800 917 2368 or visit http://payandworkrightscampaign.direct.gov.uk/index.html

- NMW rates from October 2010

Current rate

Oct 2010

Per cent increase

Adults

£5.80

£5.93

2.2

21 year olds get adult rate - threshold currently 22

£4.83

£5.93

20.3

18-20 year olds

£4.83

£4.92

1.9

16 and 17 year olds

£3.57

£3.64

2.0

Apprentices currently exempt from the NMW (e.g. those under the age of 19 and older apprentices in the first year of apprenticeship)

No coverage

£2.5O

-

- 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

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