Low paid women the main winners from 30p minimum wage increase

The TUC today welcomed the government’s announcement that it will implement the Low Pay Commission’s (LPC) recommendations to increase, from this October, the adult National Minimum Wage to 5.35 (from 5.05), the youth rate for workers aged 18 to 21 from 4.25 to 4.45 and the rate for 16-17 year olds from 3.00 per hour to 3.30.

TUC General Secretary Brendan Barber, said:
The minimum wage has been one of the government’s boldest and most successful reforms. Every time the rate has increased low paid women have benefited more than any other group of employees and the government was right to stand up to the employer lobby to give around one million people a pay boost this autumn.

TUC minimum wage fact file
The LPC has predicted that the majority of gainers from this Octobers increase (70 per cent) will be women. Just over half the gainers (50 to 55 per cent) are likely to be part-time women workers.

The LPC has consistently overestimated the number of workers it predicts will be affected by their recommendations. The LPC has undershot because the labour market has been buoyant and employer evidence has been overly pessimistic about the likely effect of any increases.

In April 1999, the LPC estimated that the initial minimum wage rate of 3.60 would benefit 1.9 million workers. The actual figure was 1.2 million. In October 2001 the LPC predicted that 1.5 million workers would gain and the actual figure was 1.3 million. In October 2004 the LPC predicted that 1.6 million workers would gain and the actual figure was 1.1 million.

Year NMW adult rate NMW gainers
1999 3.60 1.2 million
2000 3.70 0.9 million
2001 4.10 1.3 million
2002 4.20 1.0 million
2003 4.50 1.1 million
2004 4.85 1.1 million
2005 5.05 1.2 million*
2006 5.35 (from October) 1.3 million*

* Estimates - LPC 2005 report, p183

HM Revenue and Customs enforce the National Minimum Wage. It has recovered more than 21 million for low paid workers since 1999. National Minimum Wage Helpline: 0845 6000 678.

For information on National Minimum Wage rights visit: www.worksmart.org.uk