Chuka Umunna, the Shadow Secretary of State for Business, Innovation and Skills has called for an increase in the minimum wage to £8 an hour.
Chuka Umunna laid out his reasons: “The National Minimum Wage is one of the proudest achievements of the last Labour government – raising pay at the bottom without risking jobs. But the National Minimum Wage was originally designed to prevent exploitation and extreme low wages.
“Today we face a different problem – because one of the biggest challenges for Britain is that too many people do a hard day’s work but are still living in poverty or relying on in-work benefits to make ends meet:
- Over 5 million people, or 1 in 5 employees, are low paid.
- Working people are on average £1,600 a year worse off since David Cameron became Prime Minister and the value of the NMW has declined.
“We need a new plan for Britain’s future to make sure that work pays for everyday working people. To do this the minimum wage must evolve to address the new, broader problem of low pay that faces us today, not simply extreme exploitation.
“That’s why Labour has set out plans to raise the minimum wage to £8 an hour by 2020. This will bring the minimum wage closer to average earnings and affect over one million workers.
“The wage rise is based on a proposed target to increase the NMW from 54% to 58% of median earnings by 2020 following consultation with business. Forecasts show that this target will take the NMW from £6.50 in October this year to £8.00 by 2020 – a rise of £1.50 an hour for Britain’s lowest paid workers, worth £60 a week or £3,000 a year for a full time worker on the minimum wage.
“International evidence shows that countries can support higher minimum wages without risking jobs. And many of these countries have far lower levels of low pay: Britain ranks 25th out of 30 in the low pay league table across the OECD. That’s why Labour will ensure that those doing a hard day’s work are rewarded for doing so: raising the minimum wage as part of a national plan to build an economy that works for working people.”
Paul Kenny, GMB General Secretary, supported the increase: “This is a welcome and necessary first step for workers to recover the nearly 15% drop in the value of earnings they suffered over the last six years.
“It is important to shift the burden of dealing with low pay from taxpayers to the employers many of whom are sitting on record levels of cash and profits. The transition must be real so that the increase is not paid with one hand and taken away with the other.”
The increase was also supported by the TUC General Secretary Frances O’Grady: “There’s an overwhelming consensus forming that the time is now right for a much bigger increase in the minimum wage. It’s not only workers and their families who need it, getting money back into people’s pockets will give businesses the customers they need for sustained growth.
“We’re calling on everyone who is feeling the squeeze to join our Britain Needs a Pay Rise national march and rally in London next month (18 October). We will be demanding an increase to the minimum wage and a fairer share in the growing economy for workers who have suffered the biggest fall in real wages since the 1920s.”
