Tagged: Low Pay Commission

UK national minimum wage set to rise by 20p an hour from October

The national minimum wage is to increase by 20p an hour to £6.70, the biggest real-terms rise in seven years, the Government has announced.

More than 1.4 million low paid workers will benefit from the 3% hike, while rates for younger workers and apprentices will also go up — all from October.

The hourly rate for 18 to 20-year-olds will go up from £5.13 to £5.30 (3%) and by 8p to £3.87 for 16 and 17-year-olds (2%).

The statutory minimum for apprentices will jump by 57p to £3.30, an increase of 20% — the biggest ever rise.

The rates were recommended by the Low Pay Commission, although the Government is going further than the suggested figure of £2.80 for apprentices.

Source – Newcastle Journal, 17 Mar 2015



 

Sunderland among worst cities for insecure jobs and poor pay

Sunderland is one of the worst cities in the country for the proportion of people in insecure, low-paid jobs, according to a new report.

The Centre for Cities study, supported by the Joseph Rowntree Foundation, maps changes in the UK’s labour market between 2001 and 2011, and charts pay rates across the country.

It shows more than a third of Wearside workers are in a low-paid job – classed as earning less than two-thirds of the national average.

The city did see a shift towards more high-paying posts in the decade to 2011 and retains a substantial share of intermediate jobs compared to other cities, thanks to the presence of Nissan and its supply chain.

There’s no doubt low-paying jobs have always existed, and some UK cities continue to see significant growth in high-paid jobs,” said Centre for Cities chief executive Alexandra Jones.

But what has changed over the past few decades is that, in many cities, the pathways to upward mobility have been severely eroded, as their jobs markets polarise and the stable jobs of the ‘middle’ begin to slip away.”

Politicians had put too much emphasis on the number of people in work without paying sufficient attention to the quality of the jobs that were being created.

For far too long, successive governments have focused on the number, not the quality of jobs being created – but the trend towards low-paying, insecure employment is bad for workers, bad for cities, and bad for the national economy,” she said.

Lack of opportunities for worker progression threatens to trap workers in poverty cycles from which they, and their cities, cannot escape.”

The report recommends giving cities more flexibility over funding to help them support new and existing businesses, and letting the Low Pay Commission work with cities that have a strong case for introducing a local minimum wage.

Also, giving cities greater regulatory and borrowing powers to help them to reduce housing, transport and childcare costs, raising living standards for workers in low-pay occupations.

Source –  Sunderland Echo,  05 Sept 2014

North-East needs a pay rise, says TUC

TUC General Secretary Frances O’Grady explains why North-East workers need a pay rise.

Next Tuesday, April 1 will mark the fifteenth anniversary of the minimum wage – a historic milestone in British labour history.

Before its introduction in 1999 some workers were being paid as little as £1 an hour. The minimum wage has helped to end such abuse. It has proved to be a vital safeguard for employees across the North-East.

The Low Pay Commission recommends the level of the minimum wage. Its first ever chair Sir George Bain said last month “with more than one in five workers in Britain suffering from low pay, it’s time to talk about how we strengthen the minimum wage for the years ahead.”

Sir George is right. The minimum wage has undoubtedly lifted many out of extreme low pay, but research shows that many employees start work on the minimum wage and then stay there – failing to lift their pay above the minimum even after years at work.

In the North-East over 75,000 workers are on the minimum wage. Many are likely to stay on this rate for a large part of their working lives.

Lifting the minimum wage above inflation as politicians of all parties now support will help these. But many employers could do more by adopting the higher voluntary minimum standard known as the living wage – set at £7.65 an hour.

But it is not just those on low pay who have been left behind. New TUC research shows that the gap between the top ten per cent of wage earners and average pay in the North-East has grown by 5.3 per cent since 2000.

This should worry everyone. Those with the biggest pay packets may dismiss this as the politics of envy, but income inequality is bad for the whole economy. It helped drive the financial crash as banks lent the savings of the wealthiest to those in the middle who took out credit to keep up their living standards.

 For all the talk of economic recovery workers in the North-East are still seeing their pay fall in real terms and are, on average, £40 a week worse off than they were in 2009.

For some the pay squeeze has been even sharper. To take just one example, academic staff at the universities of Durham, Teesside, Newcastle, Northumbria and Sunderland have seen real-terms pay cuts of 13 per cent over the last five years.  And this is just one instance of jobs that were once secure and decently paid slowly being turned into insecure work that can no longer deliver the living standards once thought fair.

This real wage squeeze is a key aspect of a wider cost of living crisis. Energy bills have risen three times faster than inflation over the last decade, while rail fares rose above inflation yet again this January.
Childcare and housing costs have also grown as a share of average income.

People are now spending over a third of their disposable income on essentials such as food and fuel. People think of the cost of living crisis in terms of prices but the main cause of the problem is that their wages are not going far enough anymore.

So can we do something about it? Or is it just an inevitable fact of life that living standards are in decline and that for the first time in history future generations will have lower living standards than their parents?

Economic growth alone is not the answer. The economy has grown by £60bn in the last four years but real household disposable income has barely increased. Disposable incomes have fallen by nearly £500 per person.

A first step is bolder increases to the minimum wage. Had it kept pace with prices since 2007 full-time minimum wage workers would be nearly £800 a year better off. We need to make up this lost ground but also ensure that companies who illegally pay staff less than the minimum wage face the full force of the law – including being publicly named and shamed.

Secondly, we need an increased commitment to the living wage from employers in the public and private sector so that their own staff, as well as those in their supply chains, can have a decent standard of living.

Employers in many sectors can afford to pay more without job losses. That’s why we need to find new ways for employers and unions to work together to set higher wages, agreed at a sector level by modern wages councils, so that workers and businesses can both get a fair deal.

More collective bargaining can stop employers skimping on pay and get wages rising back in line with prices. Even the International Monetary Fund (hardly known for its radicalism) concedes that the decline of collective bargaining has increased wage inequality and reduced wages for ordinary people.

This month the TUC is organising Fair Pay Fortnight – a series events and street stalls throughout the North-East – to raise awareness about Britain’s cost of living crisis.

We need to put fair pay at the top of the political agenda and ensure that policymakers and employers create more high-quality jobs to boost productivity and raise people’s living standards. People need more money in their pockets if local economies are to thrive.

The North-East needs a pay rise.

Source – Northern Echo, 26 March 2014

Increase minimum wage to win in North, Tory candidate tells Osborne

> Sure sign that there’s an election just over the horizon – out they come, offering bribes like the sleazy fixers they are…

A former Tory candidate in the North East is leading calls for the party to increase the minimum wage – to give it a chance of winning seats in Labour heartlands.

The campaign urging Chancellor George Osborne to increase the minimum wage has been launched by Renewal, a campaign group dedicated to broadening the appeal of the Conservative Party and giving it a chance of winning seats in regions such as the North East where the party has very few MPs.

Mr Osborne yesterday hinted that a rise from the current £6.31 an hour to £7 was indeed in the offing.

Renewal director David Skelton finished a distant second when he stood for the Labourstronghold of North Durham in the 2010 general election.

Renewal has launched a review called “Renewing Capitalism”, which will look at new ways to create a competitive economic environment in which the consumer and the low-paid are protected, competition is cherished and anti-competitive, monopolistic behaviour is cracked down on.

It will also explore ideas to create wealth in parts of the country that have been struggling to share in prosperity since the 1980s – notably deindustrialised towns in northern England.

> Yeah… might have been better if the Tories hadn’t wrecked the north in the first place perhaps ? Might be good if they weren’t cutting funding left, right & centre.

Renewal is also considering ways of changing the face of the Conservative Party by bringing in more working class MPs, including by introducing bursaries to help people on lower incomes stand for election.

> This is a wind-up, isn’t it ? Its certainly not the Conservative party.

Mr Skelton, who was born and grew up in Consett, County Durham, said:

“The Conservative Party needs to come to terms with the fact that many people, particularly the low paid, don’t think that capitalism is working for them.

“We need to do more to show that capitalism can work for everybody in every part of the country. Being pro-market isn’t the same as being pro-big business.

“Where there are instances of abuse – in either the public or the private sector – Conservatives should come down hard to protect the consumer.”

> I think we know perfectly well what capitalism is likely to do for – and do to – us.

The review could be seen as a response to Labour leader Ed Miliband’s focus on the cost of living and attack on “predatory” capitalism. Labour is arguing that the benefits of economic recovery are not being shared by most people – and is highlighting the fact workers in the North East on average are paid £1,300 a year less than they were in 2010, once inflation is taken into account.

Some Conservatives argue that putting up the minimum wage, currently £6.31 an hour for over-21s, would help ensure that working people enjoy an increase in their standard of living as the economy improves.

> Yes, but it doesn’t create new jobs, so those in work earn a few more pennies, but the high unemployment continues, and those on benefits will continue to be the scapegoats for a situation they had no hand in.

Speaking recently, Hexham MP Guy Opperman said: “I am a well known exponent of the voluntary living wage and am very keen for an enhancement of the minimum wage now that the economic conditions are beginning to ease.

“There is an ongoing campaign to see if the Chancellor is able to make such a change when we get to the Budget in March.”

Recommendations about minimum wage rate are made by the Low Pay Commission, an independent body set up by the Government.

Mr Osborne has said he will not increase the minimum wage if it will lead to job losses but there is speculation he could announce a simultaneous cut in taxes paid by employers such as National Insurance, allowing them to pay staff more while staying in profit.

> The cut in NI contributions makes sense in the light of current policy, which seems intent on making it impossible for anyone to actually claim benefits anyway.

Source – Newcastle Journal, 17 Jan 2014