GMB Welcome Labour Plan To Increase National Minimum Wage To £8 An Hour As Step To Recover 15% Drop In Living Standards
It is important to shift the burden of dealing with low pay from taxpayers to the employers and the transition must be real so that the increase is not paid with one hand and taken away with the other says GMB.
GMB, at the Labour Party Conference in Manchester, responded to the announcement by Ed Miliband that Labour’s plan to raise the National Minimum Wage to £8 an hour by the end of the next Parliament. See notes to editors for copy of Labour Press release of 21st September 2014.
Paul Kenny, GMB General Secretary, said "This is a welcome and necessary first step for workers to recover the nearly 15% drop in the value of earnings they suffered over the last six years.
It is important to shift the burden of dealing with low pay from taxpayers to the employers many of whom are sitting on record levels of cash and profits. The transition must be real so that the increase is not paid with one hand and taken away with the other.”
Contact: Jude Brimble 07850 974198 or Kamaljeet Jandu 07956 237178 or GMB press office 07921 289880 or 07974 251823
Notes to Editors. Copy of Labour Press release Sunday 21st September
Labour’s Plan for Britain’s Future: an £8 national minimum wage
Ed Miliband has today (Sun) announced Labour’s plan to raise the National Minimum Wage to £8 an hour by the end of the next Parliament.
He will tell the Labour Party conference in Manchester that his Plan for Britain’s Future will rebuild the link between working hard and sharing in our national wealth.
The planned increase would take the NMW from £6.50 in October this year to £8 by 2020 – a rise of £1.50 an hour for Britain’s lowest paid workers worth £60 a week or £3,000 a year.
The wage rise, which will be implemented by the Low Pay Commission over the course of the next Parliament in consultation with business, would be based on a plan to boost the NMW from 54% to 58% of median earnings by 2020.
Mr Miliband said:
“Too many people are treading water, working harder and harder just to stay afloat. Too many working people have made big sacrifices but in this recovery they are not seeing the rewards for their hard work because, under the Tories’ failing plan, the recovery is benefiting a privileged few far more than most families.
“One in five of the men and women employed in Britain today do the hours, make their contribution, but find themselves on low pay. But if you work hard, you should be able to bring up your family with dignity.
“From Perth to Portsmouth to Penzance working people are demanding to know if any political party can make a difference. I have heard that despair in Scotland and across the United Kingdom.
"But this week Labour’s Plan for Britain’s Future will show how we can change and how we can become a country that rewards hard work once again. That's why we have set out plans to raise the minimum wage by £1.50 an hour by 2020 to £8 an hour – because Labour is the party of hard work, fairly paid.”
The introduction of the National Minimum Wage was one of the last Labour government’s greatest achievements – raising pay at the bottom with increased productivity, wide industry support and without job losses
But the National Minimum Wage was originally designed to prevent exploitation and extreme low wages. Today, the challenge is different, with a large number of people that do a hard day’s work but are still living in poverty or dependent on in-work benefits:
Over 5 million people, or 1 in 5 employees, are low paid. This? problem, which was building for years, has got worse under the Tories as working people are on average £1,600 a year worse off and the value of the minimum wage has declined.?
So in May 2014, Ed Miliband announced that the next Labour government will set the Low Pay Commission a 5-year goal of increasing the minimum wage to a more stretching proportion of median earnings, as recommended by Alan Buckle in his independent review on low pay. It would be for the LPC to determine the path to reach that goal during the course of the Parliament.
Today he is proposing that the goal should be set at 58% of median earnings by 2020. That would mean the minimum wage reaching £8 an hour by 2020.
A clear long term target will give businesses time to plan and adapt their business models to boost productivity to support higher wages.
The international evidence shows that countries can support minimum wages at this level with no adverse impact on employment. This would give the UK a minimum wage similar to the level in Australia and EU countries such as Belgium and Germany, but still lower than France and New Zealand.