The Labour party have announced that they would implement an £8 p.h. minimum wage over the course of the next parliament. Labour leader Ed Miliband announced the policy in an interview with The Sunday Mirror as preparations were underway for their national conference. Although a substantial rise in the minimum wage is welcome, the length of time for implementation is a concern. When cost of living and the increased deductions in tax and N.I. are considered, it’s difficult to see whether this would equate to a ‘real terms’ increase as opposed to rises in line with inflation. The facts show that 62% of children living in poverty live in a household where at least one parent works, so a living wage is crucial to help make work pay.
One in five workers in the U.K. are classed as in ‘low pay’ jobs, the minimum wage must reflect a dignified level of pay for workers to ensure that workers in full time positions should not require Government subsidies. Low pay and Child poverty are inextricably linked and the North East of England suffers from the lowest wages in the UK, with the average full-time worker paid £51 less per week than workers in other parts the country. This, linked with the highest rate of unemployment in the U.K. (9.9% Sep 14), ensures that the North East is disproportionately affected by low pay and the link to poverty. Some business leaders are concerned that substantial rises in the minimum wage will cost jobs, but when minimum wage levels are considered with other comparable E.U. Countries, the U.K. has the lowest minimum wage (see table below).
E.U. member states NMW rates Oct 2015 (Germany: Jan 2015) Source
Work has to be a better route out of poverty. Most poor children have a working parent.