Minimum Wage needs to Increase
A recent report shows that to meet the current costs of a basic living in the UK, the minimum salary needed is now at £13,400pa.
The current adult national minimum wage currently stands at £5.52ph and is set to increase to £5.73ph in October 2008. Workers aged between 18 and 21 from £4.60 to £4.77 per hour and the rate for workers under 18 from £3.40 to £3.53 per hour.
However, a recent report by the Joseph Rowntree Foundation shows that for a minimum standard of living to be reached, the adult minimum wage should be raised to £6.88ph, to meet the minimum standard salary.
The report published at the beginning of July, gave details of a broad consensus of people over a period of 2 years, who went on to give details of the necessities that made for an essential, but basic standard of living.
The definition of a minimum standard of living was not merely the amount of money needed for survival, and included ‘more than just food, clothes and shelter’, the report explained.
“It is about having what you need in order to have the opportunities and choices necessary to participate in society,” it said. For a single person of working age that included walking boots, a pay–as–you–go mobile phone and a bicycle. For all these ‘essential’ items, and rent on a modest council home, a single person would need £13,400 a year before tax,” the JRF says.
Small businesses employ a sizeable proportion of the country’s workforce. They employ a high proportion of lower paid workers and often already operate at marginal rates of profitability.
This gives rise to the concern, especially in the manufacturing and retail sectors, that if costs rise when profits are already wafer thin, redundancies are the only realistic option, thus often hitting the lowest paid hardest. There is a delicate balance between keeping inflation at an acceptable level and ensuring that workers are protected from unacceptably low levels of pay.
With the prospect of a looming recession, Employers’ organisations, on the other hand, have been expressing their increasing concerns at the impact of inflation–arising from, among other things, the recent dramatic increases in fuel and other costs–on the competitiveness of British businesses.