New minimum wage rate is a real terms pay cut, says TUC

date: Friday 28 September 2012

embargo: 00.01hrs Monday 1 October 2012

Government plans to increase the minimum wage by 1.8 per cent for adult workers and freeze the rate for young workers will result in the lowest paid suffering a real terms pay cut, the TUC said today (Monday).

The TUC said that with inflation running at 2.9 per cent (RPI), around 940,000 people, two-thirds of whom are women, would see a further squeeze on their living standards, with young people being hit the hardest.

Commenting on the new rates, TUC General Secretary Brendan Barber said: 'While we are pleased that government has rejected the siren calls of some employers to freeze the minimum wage for adult workers and apprentices, these increases are still far below inflation and will leave the lowest paid facing a real terms cut.

'These new rates are a particular blow to younger people who will face the biggest hit on their living standards. There is no evidence that the minimum wage has had an adverse impact on young people's employment so it is hard to see the logic behind their pay freeze.

'Today's rate increases do not do enough to help hard-pressed families. We need a bolder increase next year otherwise the real incomes of minimum wage workers will continue to fall, along with consumer demand.'

NOTES TO EDITORS:

National Minimum Wage rates from October 2012

- The Retail Price Index (RPI) is the rate of inflation most commonly used by wage setters

- The new rates apply to the first pay reference period on or after 1 October.

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

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

Alex Rossiter T: 020 7467 1337 M: 07887 572130 E: arossiter@tuc.org.uk