The National Minimum Wage (NMW) is set to rise by 21p an hour e_SClBin October, the government has announced.
The NMW adult rate will rise from £5.52 to £5.73 – a below-inflation 3.8% increase.
The rate for 18- to 21-year-olds will also increase from £4.60 to £4.77, while the 16- to 17-year-old rate will rise from £3.40 to £3.53.
The government said nearly one million low paid employees, two-thirds of them women, would benefit from the increase.
Business secretary John Hutton said: “When the NMW was launched (1999) the main rate was £3.60. Since then it has increased at substantially more than the rate of inflation, while the number of jobs in the economy has risen by over two million over the same period.”
Paul Myners, chairman of the Low Pay Commission, which sets the rate, said: “This increase means that the minimum wage will have risen by 59% since it was introduced in April 1999 – almost double the expected growth in prices over the same period.
“Despite many predictions to the contrary, job numbers in the industries most affected by the minimum wage have grown and grown significantly over the same period.”
TUC general secretary Brendan Barber said: “The Low Pay Commission was right to stand up to pressure from business warning of economic trouble ahead. The truth is that employers will be able to absorb these sensible increases without too much difficulty.”