Minimum Wage increase shares headlines with ‘Living Wage’ campaign

Today sees an increase in the National Minimum Wage rates (see below). For workers aged 21 and over the hourly rate is now £5.93. However this change has been sharing the headlines with the growing campaign for a ‘Living Wage’.

The National Minimum Wage (NMW) is the statutory minimum amount per hour that most workers in the UK are entitled to be paid. The HMW was introduced in April 1999 at £3.60 an hour for workers aged 22 and over. The independent Low Pay Commission recommends the level of the NMW to government and there are no variations by region, occupation, industry or employer size.

But at last week’s Labour Party conference new leader Ed Miliband told delegates that “the foundation of our economy in the future must be a living wage”.

The Living Wage is an amount  that a person working full-time, with no additional income, should be able to afford a specified quality or quantity of housing, food, utilities, transport, health care, and recreation. 

The "London Living Wage" was initiated by the Mayor of London in 2005. It is calculated by the Greater London Authority’s Living Wage Unit and in June 2010 was raised to £7.85 an hour.  Although it has no statutory basis but nearly 100 private and public sector employers across London have implemented the rate. In September University College London announced it was to introduce the living wage for all staff - including cleaners working for contract companies.
There are other living wage campaigns and commitments across the UK and sectors of the economy. In Glasgow there are now more than 130 employers who have signed up to the Glasgow Living Wage of £7 an hour. This figure is based on research carried out by the Joseph Rowntree Foundation. 

In another Labour Party conference speech, Scottish Labour party leader Iain Gray pledged that public servants in Scotland would be paid a "Scottish living wage" of more than £7 an hour if Labour is victorious in next May’s Holyrood elections.

The charity Church Action on Poverty calls for a rate of £7.60 in England outside London based on a ‘Minimum Income Standard’ calculated by The Centre for Research in Social Policy at Loughborough University.

The Living Wage rate is likely to play an increasing role as a benchmark in pay negotiations and public policy debates from now on.
 
NMW Changes

From 1st October 2010 the NMW wage are raised rates from:
•    £5.80 to £5.93 an hour for workers aged 21 and over
•    £4.83 to £4.92 an hour for workers aged 18 to 20
•    £3.57 to £3.64 an hour for workers aged 16 to 17

The adult minimum wage rate is extended to 21-year-olds; previously the qualifying age for the adult rate was 22. A new apprentice minimum wage of £2.50 per hour is also be introduced for apprentices under 19 and those aged 19 and over, but in the first year of their apprenticeship.