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Record employment and high profits show that employers can afford a national minimum wage increase, according a submission to the Low Pay Commission by the TUC published today (Thursday).

Record employment and high profits show that employers can afford a national minimum wage increase, according a submission to the Low Pay Commission by the TUC published today (Thursday).

The claim comes as ONS figures show the employment rate at its highest level since comparable records began 45 years ago. Unemployment now stands at below 5%.

Profits have also risen to record levels. The net rate of profit in UK-owned companies is now 13%, the highest in nearly 20 years. The service sector, which employs many workers on the minimum wage, sees profits of 19% – the highest since records began.

“The combination of large profits in the service sector and high employment shows that employers can afford a pay rise for minimum wage workers,” says the TUC General Secretary Frances O’Grady.

“Employers will always protest that the minimum wage in unaffordable. We need to look beyond the rhetoric, and focus on the evidence. This is a golden opportunity to raise living standards for nearly two million low-paid workers.

“Boosting workers’ spending power will be especially important given the risks our economy faces from Brexit.

“The government wrongly denies the full minimum wage to workers under 25. Under 25s face the same costs as older workers, and are highly productive. Young workers cannot be left behind. The full rate should be extended to everyone aged over 21 and the age pay gap closed.”

NOTES TO EDITORS: 
- The Low Pay Commission (LPC) is an independent body that advises the government about the National Minimum Wage. It will be holding an oral evidence session with the TUC in September. The TUC’s full evidence can be read here: www.tuc.org.uk/sites/default/files/LPC-InquiryTUCresponse.pdf
- The current national minimum wage is set at £7.20, and the LPC will recommend a new rate to the government in April 2017. 
- Since April 2016, there have been a series of lower rates for workers under 25, and those on apprenticeships.
- Employment level data comes from the ONS labour market statistics (published 17 August 2016): www.ons.gov.uk/releases/uklabourmarketstatisticsaug2016 
- Profitability data for the whole year 2015 from ONS Profitability of UK Companies (published 5 August 2016). Profitability data for UK companies excludes the financial sector and oil and gas exploration on the continental shelf, neither of which are low-paying sectors. http://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/dataset…;
- All TUC press releases can be found at www.tuc.org.uk
- Follow the TUC on Twitter: @The_TUC and follow the TUC press team @tucnews
- Congress 2016 will be held in the Brighton Centre from Sunday 11 September to Wednesday 14 September. Free media passes can be obtained by visiting www.tuc.org.uk/MediaCredentials2016 and completing an online form. Applications must be in by noon on Tuesday 23 August. Any received later than that will be processed in Brighton and will cost £75.

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