Posted: Friday 9 September 2011
Increase in National Minimum Wage
I blogged on this topic earlier this year when the announcement was made in April by the Department for Business, Innovation and Skills that national minimum wage rates were to be increased. With the changes coming into effect from the beginning of next month, I thought this might be an interesting topic to re-visit at this juncture.
The 2.5% increase will mean that the national minimum wage will climb to over £6 for adults, a first since its introduction in 1999. However, some commentators suggest this development is not as positive as initial impressions might suggest.
The BBC reported back in April that despite claims from Business Secretary Vince Cable that the increase would benefit over 890,000 of the lowest paid workers in Britain, a number of concerns had been expressed. Chief among these, the BBC reported, were fears that the changes would be of little or no real significance for workers due to rising costs as a result of inflation.
The British Chamber of Commerce seems to go further in the report, suggesting that the changes could actually be of detriment to UK unemployment as they run the risk of “pricing young people out of work”.
While many will no doubt contend that any increase to the national minimum wage, however slight, is to be welcomed, it should be remembered that this development is occurring against a backdrop of widespread pay freezes and both pay and pension cuts in the public sector. This, coupled with extensive unemployment across the UK, underlines the fact that if the increase does bring about positive change for some, it does not do so for others.
