News
Minimum wage to rise to £6.50 in October 2014
26 - 03 - 2014
The National Minimum Wage (NMW) is expected to rise by 19p an hour this October taking the hourly rate up to £6.50. This is expected to benefit a million of the UK’s workers.
The rate for 18-20 year olds is set to increase 10p per hour making the new hourly rate £5.13. The rate for 16 -18 year olds is set to rise 7p to £3.79 and apprentices will receive an extra 5p taking their hourly rate to £2.73.
This is achieved with the consumer price index (CPI) rate of inflation currently set as 1.9%, according to the Office for National Statistics (ONS).
“The recommendations I have accepted today mean that low-paid workers will enjoy the biggest cash increase in their take-home pay since 2008,” said Mr Cable.
He added “I urge businesses to consider how all their staff - not just those on the minimum wage - can enjoy the benefits of recovery.”
Sir George Bain said “that many employers could now afford to pay their workers much more.”
However, it has also been stated by Sir George that, “If you set it at the ‘living wage’…you would cause massive unemployment in areas like retail and social care.”
However, it has been argued that this is only the case in around five sectors and that there are actually many other sectors where it is possible to pay employees above National Minimum Wage.
Although NMW is moving in the right direction the latest figures are still well below the ‘living wage’; which is the amount of money an average person can be expected to live off. In London this figure is £8.80 and for the rest of the country, £7.65.
Even with the increase of National Minimum Wage, it is still well below the definition of low pay, as set by the Organisation for Economic Co-operation and Development (OECD).
In January this year, Chancellor George Osborne said he supported the idea of the minimum wage reaching £7.00 an hour by October 2015; however a rise of more than 7% would be needed to reach this.
However, this is not the view of all as Len McCluskey, Unite’s general secretary, states “To make matters worse, George Osborne cruelly held out hope that the rate would rise to £7.00.”
He then added “The government claims it is on the side of working people but companies are sitting on a cash mountain of £500bn and they should be forced to share more of it with the lowest paid.”
