The national minimum wage was one of the proudest achievements of the last Labour government. Despite warnings from a young David Cameron that it would "send unemployment straight back up" it did no such thing and instead improved the lives of millions. Yet today the security if offered working people is under threat. First, because it's value has dropped. Secondly, because 300,000 workers are being paid at less than the legal minimum.
Turning first to the level of the minimum wage. Every year since 2008 it has failed to keep pace with inflation and is now worth £1000 less than it was 5 years ago. The Living Wage campaign is a wonderful demonstration of what Labour councils, trade unions and ordinary campaigners can achieve for the low paid. But in government we must go further still.
Rather than simply urging firms to sign up to the Living Wage, we must raise the minimum wage up from the current £6.31 to bring it to Living Wage levels (£7.65 UK and £8.80 in London). This would free thousands of hard working people from poverty pay. It is a disgrace that so many users of food banks are people in work. It is also a disgrace that our benefits system has been gradually allowed to subsidise low pay. As Andrew Lewin argued in a brilliant post on Labour List that raising the minimum wage to the level of the living wage could not be achieved overnight. On the other hand, but should be seen as a target to be achieved, step by step, by 2020.Turning to the question of enforcement. A disturbing recent report has shown that 300,000 workers receive less than the minimum wage and the number is growing fast see here. In as many as 8 London boroughs (Waltham Forest, Hackney, Haringey, Ealing, Sutton, Lewisham, Newham and Bexley) 5% of workers are paid below the legal minimum. At the same time there has only ever been one prosecution in London for failing to pay the minimum wage. The report suggests the following measures:
- Remove the £5000 cap on fines
- Name and shame firms prosecuted
- Give local authorities the power to bring NMW prosecutions
- Insist on NMW payment for home carers' travel time
These deserve serious consideration. The last Labour government worked hard to redistribute income through benefits to help the lowest earners. The focus of the next Labour government must be on making sure that everyone earns a decent wage in the first place.
Turning first to the level of the minimum wage. Every year since 2008 it has failed to keep pace with inflation and is now worth £1000 less than it was 5 years ago. The Living Wage campaign is a wonderful demonstration of what Labour councils, trade unions and ordinary campaigners can achieve for the low paid. But in government we must go further still.
Rather than simply urging firms to sign up to the Living Wage, we must raise the minimum wage up from the current £6.31 to bring it to Living Wage levels (£7.65 UK and £8.80 in London). This would free thousands of hard working people from poverty pay. It is a disgrace that so many users of food banks are people in work. It is also a disgrace that our benefits system has been gradually allowed to subsidise low pay. As Andrew Lewin argued in a brilliant post on Labour List that raising the minimum wage to the level of the living wage could not be achieved overnight. On the other hand, but should be seen as a target to be achieved, step by step, by 2020.Turning to the question of enforcement. A disturbing recent report has shown that 300,000 workers receive less than the minimum wage and the number is growing fast see here. In as many as 8 London boroughs (Waltham Forest, Hackney, Haringey, Ealing, Sutton, Lewisham, Newham and Bexley) 5% of workers are paid below the legal minimum. At the same time there has only ever been one prosecution in London for failing to pay the minimum wage. The report suggests the following measures:
- Remove the £5000 cap on fines
- Name and shame firms prosecuted
- Give local authorities the power to bring NMW prosecutions
- Insist on NMW payment for home carers' travel time
These deserve serious consideration. The last Labour government worked hard to redistribute income through benefits to help the lowest earners. The focus of the next Labour government must be on making sure that everyone earns a decent wage in the first place.
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