Member Article

Minimum wage increase brings conflict

The national minimum wage for adults has now increased to £5.35, but has resulted in potential conflict between bosses and workers.

The rise has been welcomed by thousands of low paid workers, but the CBI has warned that further increases could be harmful to the UK’s economy. The organisation said recently that the minimum wage has gone up by 27% since 2002, and that firms need more time to absorb previous increases.

Susan Anderson, CBI Director of HR Policy, said: “The minimum wage has improved living standards for many workers, but continuing heavy annual increases are simply not sustainable, as the Low Pay Commission itself acknowledges.”

She added that a higher minimum wage discourages employees from seeking extra training and responsibilities. “Employers support the minimum wage and it must not be left to wither on the vine, but increases must be more affordable.”

The TUC has welcomed the increase, in particular the benefits it brings to low income families. But Brendan Barber, Secretary General of the TUC, is concerned about the future. “Any calls from mean bosses that the minimum wage should be frozen next year must be ignored by the Low Pay Commission and the Government. The economy can easily afford another increase next year and there is no reason why the UK can’t have a minimum wage of more than £6 an hour by 2008.”

Both the CBI and the TUC agree that more should be done to combat unscrupulous employers who avoid paying the minimum wage. Mr Barber said that bosses who persistently pay “poverty wages” should be “named and shamed.”

Employment relations minister, Jim Fitzpatrick said the government would crack down on employers who mistreated vulnerable workers. “Millions of working people have directly benefited from the decent minimum standards we have put in place, like the minimum wage. “I want everyone to be aware of the rights they have in the workplace, as a step towards ending unfair treatment and discrimination.”

The minimum rate for workers aged between 18 and 21 has increased by 20 pence to £4.45, while 16 to 17-year-olds will now receive £3.30, a rise of thirty pence.

This was posted in Bdaily's Members' News section by Ruth Mitchell .