Approximately one million workers will benefit when the national minimum wage (NMW) increases to £5.73 per hour on Wednesday 1 October, the Scottish Trades Union Congress (STUC) and TUC says today (Sunday).
Two-thirds of the beneficiaries will be women, reinforcing the NMW's positive role in narrowing the gender pay gap.
The increase in the NMW will also save the taxpayer an extra £245 million in reduced payments of in-work benefits.
Next week’s 3.8 per cent increase in the NMW (from £5.52 to £5.73) will be the ninth increase since it was introduced in April 1998. Over the last nine and a half years, the NMW has increased by 59.2 per cent, compared to a 44.2 per cent growth in average earnings.
Annual increases in the NMW since April 1998 have not led to any significant job losses, despite predictions from some business lobbyists. In fact, the latest labour market statistics show that in the year up to June 2008, in which employment growth across the whole economy dropped to just 0.6 per cent (148,000 more jobs), the low paying job sectors – including retail, cleaning and agriculture – grew at twice the pace (1.2 per cent, 102,000 more jobs).
The STUC says that this gives the Low Pay Commission an opportunity to decide a significant increase, above the average rise in incomes, when it sets the October 2009 rate later this year.
The STUC and TUC today renewed their call for tougher penalties to deter minimum wage cheats, better resources for enforcement and the extension of the Gangmasters' Licensing Authority regime to other sectors where exploitation is common, including construction, care and hospitality.
STUC General Secretary Grahame Smith said “"We welcome the continued rises in the minimum wage and the significant increase in the estimated number of workers who will benefit as a consequence.
“The increase in minimum wage will help thousands of families in Scotland and throughout the UK however the low paid face the challenge of the current inflation rates resulting in a far higher proportion of family incomes being spent on food and energy where prices continue to rise.
“We continue to reject alarmist noises emanating from some business leaders and are pleased that Government and more forward looking businesses accept that a highly skilled and highly productive, modern workforce requires sustainable terms and conditions and an end to poverty wages.
“Employers in Scotland and throughout the UK who fail to pay the minimum wage must be exposed and prosecuted.
“Tougher enforcement penalties and greater funding for HM Revenue and Customs are the best ways to crackdown on these minimum wage cheats.”
ENDS Contact Media enquiries Dave Moxham (STUC) T 0141 337 8100