Barber says strong increase would help stimulate demand and throw a lifeline to businesses
The TUC is calling for the National Minimum Wage to be raised next year by more than the rate of inflation.
The LPC, which advises the government on the NMW, is currently considering the rates for the period from October 2012 to September 2013.
The TUC will tell the LPC on Tuesday that a rise by more than the retail prices index (RPI) or the growth in average earnings – depending on which is higher – is both necessary and affordable, and will help address the loss in the real value of the NMW caused by below-inflation increases in the rate in previous years.
TUC general secretary Brendan Barber said: ‘Last year the LPC recommended a 2.5 per cent increase to the adult minimum wage rate which turned out to be too modest. Inflation is outstripping both average earnings and the minimum wage, causing a huge squeeze on living standards – particularly for the low paid.
‘Although economic recovery will be slow – and will be hindered by the government’s public spending cuts – most economists agree that the prospects for growth in 2012 and 2013 will be better than this year, so employers should be able to sustain a bigger increase next time.
‘The TUC believes that a strong increase would help to stimulate consumer demand, and throw a lifeline to businesses struggling to find customers as real living standards fall.
‘The LPC should also recommend the extension of the minimum wage to excluded workers, including some domestic workers and seafarers, and continue to tighten up on enforcement.’
The TUC submission also strongly opposes the abolition of the agricultural wages board (AWB) for England and Wales, which protects vulnerable farm workers from exploitation.
In its submission to the LPC, the TUC also recommends:
- The rate for 18 to 21-year-olds should increase in 2012 by at least the same percentage as the adult rate next year. The TUC wants to see a much more significant boost to the three youth rates as the economy recovers.
- The special rate for apprentices either aged under 19 or in the first year of their apprenticeship should increase more sharply. The 20 per cent increase in apprentice ‘starts’ last year shows that there is real scope to narrow the pay gap between the rate for apprentices and 16 and 17-year-olds.
- The LPC should recommend the extension of the NMW to cover seafarers with a close link to the UK economy, such as those who work between two ports in the UK, or on the ships that support oil and gas exploration in the North Sea.
- The exemption for domestic workers who are said to live as part of the family employing them should be abolished, as it has been subject to wide-spread abuse.
- The LPC should recommend an increase in the budget for enforcement, and should also recommend the restoration of the budget for advertising the key details of the NMW and how workers can enforce their rights.
- The LPC should call on the government to take serious steps to ensure that the law is vigorously enforced to stop the cynical exploitation of vulnerable young interns and bogus volunteers.
- Other areas where tougher enforcement is needed including non-payment of care workers for travel between clients and the abuse of zero-hours contracts.
- The LPC should consider whether the law should be changed in order to make advertising jobs below the NMW illegal. It should also recommend that HM Revenue and Customs (HMRC) should regard all such adverts as evidence of intent to break the law, and take appropriate action to ensure that the minimum wage is duly paid.
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