
The minimum wage will rise for most workers this October by 7p an hour to £5.80, it was announced today.
Yet the modest 1.2% rise for those aged 22 and over is less than last year’s 3.8% increase. However, those on lower wages are currently being hit by larger cost of living rises than when last year’s announcement was made.
The British Chamber of Commerce (BCC) pushed for a minimum wage freeze in October to protect jobs. This highlights the delicate balance between the needs of low-paid workers and businesses during the recession.
The BCC is part of a panel of stakeholders including academics, economists and unions that form the Low Pay Commission which sets the minimum wage.
Last year, the minimum wage for the over-21s rose from £5.52 an hour to the current £5.73 level – a 3.8% increase.
The real level of inflation – the measure of rises in living costs – for many low-paid workers is the Consumer Prices Index, which excludes mortgage costs. Most workers on basic salaries are unlikely to be homeowners.
The current CPI cost of living figure is 2.9%. This is higher than the 2.2% figure in place in March last year when the larger 2008 increase was announced.
The Retail Prices Index inflation figure, which includes mortgage payments, currently shows a minus 0.4% figure, largely due to falling homeloan costs.
Those aged 18 to 21 will see their basic hourly wage rise from £4.77 to £4.83 from October – a 1.3% rise. Anyone aged 16 or 17 must be paid at least £3.57 from October, up from £3.53, a 1.1% increase.
Have your say
This is an open discussion but the comments do not represent the views of MSE. We want everyone to enjoy using our site but spam, bullying and offensive comments will not be tolerated. Posts may be deleted and repeat offenders blocked at our discretion. Please contact fbteam@moneysavingexpert.com if you wish to report any comments.