Labour conference 2014: why Britain needs a higher minimum wage

Ensuring a minimum wage of £8 an hour will mean the low paid seeing some of the benefits of the economic recovery.

Ensuring a minimum wage of £8 an hour will mean the low paid seeing some of the benefits of the economic recovery

Ed Miliband has announced that under a Labour government the minimum wage will rise to at least £8 an hour.

The plan will ensure that the lowest paid have about £60 extra in their pockets, ensuring that they are not left behind as the economy grows.

The minimum wage is set to rise by 19p in 10 days’ time to £6.50, but Miliband has ­promised to add £1.50 an hour to that.

The  increase would be ­introduced in stages by the Low Pay Commission before October 2019.

This comes on the back of a pledge Miliband has already made which would ensure that if Labour wins power the minimum wage will increase in line with median earnings over the course of the next parliament.

And a rise is long overdue. Since peaking at 9.6 per cent above inflation in 2001, the value of the minimum wage has gradually fallen over recent years. Inflation levels surpassed the minimum wage percentage in 2008; the biggest difference between the two coming in 2011, when inflation percentages were almost 2 per cent above the minimum wage.

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As well as failing to keep up with the cost of living, an analysis by the Resolution Foundation last year found that a worker on the minimum wage would need to work for 380 hours a week to match the annual salary of someone in the 99th percentile.

In other words, hard work has increasingly been going unrewarded.

George Osborne has already sought to encroach on traditional Labour territory by promising an inflation-busting rise to £7, but Miliband is seeking to take the incentive back by promising an increase to £8 an hour.

Meanwhile the CBI and other rich executives are already scaremongering on the back of Miliband’s announcement. But it’s worth remembering how many of the same people and organisations vociferously opposed the introduction of the minimum wage and all subsequent increases.

Better wages for low paid workers is also not necessarily anti-business. Workers are consumers too, and if you pay your employees more they will tend to have more disposable income with which to visit the shops – therefore benefiting business. The key is striking the right balance.

What’s clear is how Britain’s army of low paid workers urgently need a leg up. Real wages have fallen by over £1,600 a year since 2010, and tax and benefit changes mean that the average household will be £1,000 a year worse off by the General Election next year.

Ensuring that the minimum wage begins to catch up with median earnings will mean the low paid enjoying some of the benefits of the economic recovery that the affluent are seeing.

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19 Responses to “Labour conference 2014: why Britain needs a higher minimum wage”

  1. Data

    2.5% inflation alone would bring it to £7.50 by 2020.

  2. Suzanne M

    This, combined with effective policing (by HMRC?) to enforce minimum waged level playing field (especially among smaller enterprises) and then allowing and encouraging employers to choose among the best candidates to present themselves whether they are British or legal immigrants. That should put paid to the odious notion that immigrants are ‘taking our jobs’, whilst raising standards among employees in Britain. Immigrants seeking jobs in Britain are often both highly motivated and highly skilled, and we Brits can choose either to deny and resist that, or else treat it as an opportunity to learn and improve.

  3. Dave Roberts

    Utter rubbish by a Guardianista. The vast majority of the low paid are working in the black economy for cash while claiming benefits. Everybody knows this, I do because I and people I know employ some. And no, I don’t have any figures, because there aren’t any, for obvious reasons. Read ” The Mystery of Capitalism” by Hernando de Soto for more details.

  4. Guest

    You’re a guardianista? Right, pull the other one.

    As you make up myths about the poor you hate, screaming that wages and benefits must fall, simply because of your highly illegal actions.

    There’s no mystery, capitalist, you’re simply hostile to workers.

  5. Leon Wolfeson

    Well yes, but that would involve spending money on enforcement. Ha.

    And as Dave shows, nothing short of closed borders will satisfy the far right.

  6. Leon Wolfeson

    Why are you using CPI? Do people not have to pay for accommodation? Use RPI.

  7. treborc1

    Odious well if you say so…. I’m no longer sure I agree with you or the Progress party.

  8. treborc1

    I think the left is worried as well, very worried.

  9. GO

    The vast majority of TVs are sold out of white vans for cash. Everybody knows this, I do because I and some of my mates have bought TVs out of white vans for cash. And no, I don’t have any figures, because there aren’t any, for obvious reasons. Read “Critical Thinking Skills: Developing Effective Analysis and Argument” by Dr Stella Cottrell.

  10. Cole

    What a load of old rubbish (‘the vast majority of the low paid’ etc). I’m really bored with these right wingers who claim they know how ‘real’ people live on the basis of something they heard in the pub or golf club.

  11. Leon Wolfeson

    The left haven’t had representation for some time now, that tends to be worrying in general.

    But no, the left are generally not calling for closing the borders and hating the Other. Hating capitalists, yes, but that’s not the same thing at all.

  12. V Hale

    This is absolutely disastrous news for unemployed young British people. I was quite seriously ill on and off for most of my early twenties and so won’t be finishing my degree until next summer when I’ll be 25. I’ve desperately tried to get part time jobs during this time and have had months where I’ve applied to thirty or forty a month – factory jobs, retail jobs, office jobs etc but with an almost blank CV I can understand employers not wanting to take a gamble on me. As I’ve been registered as a student for 6 years I’ve not been eligible for Jobseekers’ Allowance either, and so my mum kindly lets me live with her in return for 6 hours a day of housework and gardening and I get £15 spending money a month, so I am not exactly “living it large”.
    Anyway, considering my fairly blank CV (I worked in Burger King as a teenager and spent summers doing catering work before I hit the ‘over 21’ higher rate of minimum wage) I can understand, as I say, employers not wanting to take a risk. What with the Labour Party wanting to make it impossible to sack workers and have a ludicrously high rate of minimum wage why the hell would employers put themselves out and employ unemployed young British people instead of tried and tested Eastern European immigrants for whom £8 an hour is practically a doctor’s wage and who have full CVs? Miliband doesn’t understand and doesn’t give a fuck about poor young British people, and nor do the Guardian-reading public sector employed middle classes for whom £8 an hour sounds like a wonderful idea. A plague on all their houses.

  13. blarg1987

    It depends on your belief in economic theory, some believe that wealth trickles down the economy and therefore increasing the minimum wage will do as you suggest.

    However others believe in the trickle up affect, if say for example everybody in your community had a £1000 pay rise, they are more likely to spend their money locally, which then creates demand which employs local people.

    Money is like energy it is neither created nor destroyed only transferred.

  14. Guest

    Oh right, so there are no jobs in Australia. Where the minimum wage is £9.14 per hour, with less exemptions than our system allows. Oh, wait.

    Then you blame the Other, scream because workers have basic rights, etc. You are indeed a plague on our country, as you try and fuck over younger workers.

    Feel free to leave if you hate it here so much. But do pay back that student loan!

  15. V Hale

    I didn’t blame anyone! It makes perfect sense to come to a country with a ridiculously high minimum wage- Eastern European workers would be silly not to take advantage of this. Australia has lots of jobs thanks to mining etc, their economy is entirely different and they have very strict immigration rules. It really isn’t comparing like for like. But carry on being condescending and displaying your oh so caring attitude to unemployed people. Aren’t the left delightful?

  16. treborc1

    Well Hate will do that, seems labour listening to Miliband today hates the Tories , sadly I cannot I disapprove of their policies as I do labour welfare reforms.

    But sadly I think the public are sick of it, I know I am.

  17. Leon Wolfeson

    But you won’t get up and fight for i.e. PR.

  18. Guest

    You are blaming them. Every time. You are saying they’re the problem, outright.

    Then you frantically make excuses about the situation in Australia, which has twice the rate of immigration we do, and substantially more lax rules on skilled immigration.

    You are not a left winger, either, but thanks for projecting your views onto me. You’re the one calling for starvation wages for the British you hate so much.

  19. V Hale

    How is it excuses if it’s true about Australia? I’m deleting my post because frankly, after your response after I disclosed personal information about severe health problems you reply you “hope I pay my loan back” and launch into vitriol all while completely anonymous- you are a zealot

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