Politics

What is the national minimum wage and when will it increase?

With the UK economy in dire straits thanks to inflation soaring to 9.9 per cent and driving up the price of consumer goods while salaries stagnate and a winter of extortionate energy bills awaits, the Trades Union Congress (TUC) has called for the minimum wage to be raised “as soon as possible”.

“Every worker should be able to afford a decent standard of living,” said TUC general-secretary Frances O’Grady.

“But millions of low-paid workers live wage packet to wage packet, struggling to get by – and they are now being pushed to the brink by eye-watering bills and soaring prices.”

The current UK national minimum wage stands at £9.50 per hour for workers aged 23 and over, £9.18 for those aged between 22 and 21, £6.83 for the 20 to 18s and £4.81 for under-18s and apprentices.

Those rates came into effect from 1 April this year, the same date on which they are adjusted annually, and represented a 6.6 per cent increase in the top rate from the previous year’s £8.91.

Those aged 22 and younger receiving the lower rates received raises of 83p, 27p and 19p, which then-chancellor Rishi Sunak said was “broadly consistent” with previous increases in an announcement last October.

The government now says that it is attempting to strike a balance and warns that raising the minimum wage too far or too quickly risks sparking mass unemployment if companies are unable to meet salaries.

But the TUC insists workers must get their “fair share” at a time when companies are paying out higher dividends to shareholders.

“We’ve had promises from the government time after time, that we should have a high wage economy,” Ms O’Grady told BBC Radio 4’s Today programme.

“It should start with low-paid workers who are absolutely terrified about what those hikes in energy bills will mean for their budgets, having to fork out for school uniforms and put food on the table.”

She argued that citizens on better wages were less likely to have to claim benefits from the state and more likely to pay taxes and contribute to the economy as consumers.

She also criticised the minimum wage being lower for younger pay, adding: “It’s clear to me, and I think to many people, that people ought to be paid the rate for the job, regardless of the age they are.

“If they’re working as hard doing the same job, why should they be discriminated against simply because they’re under 23?”

The UK national minimum wage is set in response to the median wage, an average calculated by adding together every pay packet in the UK and identifying the middle point.

The present target is for the minimum wage to reach 66 per cent of median wages by 2024, an approach that is expected to raise the rate again to £10.50 from 1 April 2023.

However, the TUC wants to see the average for all workers hit £20 an hour, with the minimum wage rising to 75 per cent of that, or £15 per hour, a long way short.

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