A rising minimum wage has taken a record number of people out of low pay, but Unite has warned that more must be done to support families who are struggling to get by.
A report from the Resolution Foundation think tank has found that the number of low-paid workers in Britain fell last year by 200,000 – more than half of these were women. The sectors with the largest fall in low pay were administrative and support services and retail, with 110,000 workers escaping low pay in 2018.
The think tank singled out the rebranded minimum wage, known as the National Living Wage (NLW), as the driving force behind the recent falls in the number of low paid workers. Since the NLW was first introduced in 2016, low-pay Britain accounts for 17 per cent of the total workforce, down from just over 20 per cent in 2015.
Now, the proportion of low-paid workers, who are defined as earning less than two-thirds of median wages, has fallen to its lowest level since 1980.
The figures prompted the Resolution Foundation to predict that, as long as the minimum wage continues to rise, low pay in Britain could be eliminated altogether by the mid-2020s.
Unite welcomed the news but cautioned that a rise in the minimum wage as an hourly rate hasn’t necessarily translated to a rise in people’s weekly take home pay – in fact there is now a gap between weekly and hour wage growth. This is down to the fact that people entering the labour market are working fewer hours, many of whom may be in insecure work such as on zero hours contracts.
The Tory government has pledged to continue hiking the NLW significantly each year until 2020, while the Labour party has gone one step further and called for a Real Living Wage, which is pegged to the real cost of living and not median earnings.
But Unite believes that hiking the minimum wage can only be part of the solution to ensure families don’t fall through the cracks – especially in light of the fact that, for example, child poverty is rising even as low pay has fallen.
This was a point highlighted by the Resolution Foundation’s Torsten Bell, who said in an interview with BBC Radio 4 Today that part of the reason child poverty was up was “because we are cutting benefits which go disproportionately to families with children”.
The Resolution Foundation’s findings on the minimum wage come as a new scathing report uncovers the extent of the economic divide between London and the North.
The ground-breaking report, carried out by Lord Bob Kerslake, found stark regional inequalities in a range of key measures, from social mobility to income levels to life expectancy and more.
A linked analysis from the Manchester Evening News found that even children’s oral health – which is a key indicator of poverty – is significantly worse outside of London and the South. The five worst places for oral health were all in the North West of England – with 40 per cent of five-year olds in Rochdale, Salford, Manchester, Blackburn and Knowsley showing signs of tooth decay.
The North-South divide is so bad that it prompted Lord Kerslake, former head of the civil service, to compare the UK to Germany at the end of the Cold War.
“A huge gulf exists between the UK’s best-performing regions and towns,” Lord Kerslake noted, which he said made the UK ‘one of the most regionally unbalanced countries in the industrialised world’.
Unite assistant general secretary Steve Turner said that while it was welcome that a hike in the minimum wage has taken a record number of people out of low pay, he argued that there are still millions of households who cannot make ends meet.
“After a decade of crippling austerity, wage stagnation and skyrocketing living costs, poverty is still blighting the lives of far too many people,” Turner noted.
“We must be bolder than merely increasing the minimum wage incrementally every year — the minimum wage should be hiked to at least £10 an hour now, so that it reflects and is in the future linked to the real cost of living,” he said. “Minimum wage enforcement must be strengthened and funded as well – it is a national scandal that we have only nine enforcement officers to cover 18,000 employment agencies.
“We must reverse the damage austerity has wrought by investing in our public services and communities equitably throughout the UK, not just in London or the South — creating jobs and stimulating our economy so that prosperity is shared by all. And most importantly, we need stronger unions with the return of sector level collective bargaining to ensure low pay is banished from this country once and for all.”