The government may be considering a freeze on the national living wage as it counts the cost of the coronavirus pandemic.
According to a report in the Sunday Telegraph, the plans to increase the national living wage from £8.72 to £9.21 in April 2021 are seen as “unaffordable” by the government, and it may consider applying an “emergency brake” to further rises.
Impact of Covid-19 on pay
‘Emergency brake’ on minimum wage rises may be needed
Earlier this year the Low Pay Commission, which advises the government on minimum wage uprating, said the government might need to abandon its pledge for the national living wage to reach 60% of median earnings in the next four years.
The Telegraph reported that chancellor Rishi Sunak would announce the change in the upcoming autumn Budget, as the Low Pay Commission believed organisations would not be able to afford to increase wages for low earners following the crisis.
Low Pay Commission chair Bryan Sanderson told the Sunday Telegraph that it had listened to the views of employers and trade unions carefully, and was considering whether the emergency brake was needed.
Why is it always the wages of people at the bottom that are ‘unaffordable’ and never the wages of people at the top?” – Andy Burnham, mayor of Manchester
“There are not many winners in today’s uncertain world. Our contribution to help steer a path through the complexity will be to provide a recommendation founded on rigorous research and competent analysis which has the support of academics and both sides of industry,” he said.
But Frances O’Grady, general secretary of the TUC, said it would be “totally wrong” to freeze the pay of the key workers who have served the nation during the pandemic. She said the rate should be increased to that of the “real” Living Wage, the £10.75 per hour rate suggested by the Living Wage Foundation, which is voluntarily paid by around 6,000 firms.
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
“The government must not renege upon its commitment to raise the minimum wage. Millions of low-paid workers are struggling to make ends meet. That’s not right during a pandemic – or at any time,” said O’Grady.
Mayor of Greater Manchester, Andy Burnham, said: “Why is it always the wages of people at the bottom that are ‘unaffordable’ and never the wages of people at the top?”
18 comments
And not before time!!
The National living wage – or – minimum pay has stripped all potential profits away from small craft businesses and should be abolished.
All pay deals should be market led, where the more scarce the skill, the higher the pay.
It was put in place because people at the lower end if the pay spectrum could survive .because inflation on food / rent / heating and other essentials were increasing faster than peoples wages and as I understand people have skills that Employers need but struggle to get hold of can already get. Better salary
I am a senior support worker and earn £9.02 an hour. As a key worker I worked throughout lockdown and provided palliative care for those dying of Covid 19. I contracted the virus myself. I put my life and that of my family on the line. The cost of living has risen quite dramatically. Being a low paid worker I struggle to make ends meet……it’s not that I want a rise in my wages…..I NEED a raise. Abolish it!!!!!!??? Yeah let’s do that and plunge thousands of key workers into poverty…..we kept the country going…..what would you do without us…..you’re selfish..your name should not be Mr Smart it should be Mr Stupid.
I’m bored of hearing the term key worker and they should be treated differently to everyone else
The only key workers in this country are the workers who don’t have a legal status to strike the Police and Army
The rest of you pick and choose when your a key worker
Food, insurance, gas, electric have all increased at a higher level than many peoples wages. Each year see’s your disposable income shrink will little chance of saving money for a holiday, and many opting for a cheap weekend away or days out in the summer months. This is the reality of the working class in today’s Britain where the rich get richer and the get poorer.
Having a minimum wage increase makes a significant difference to a persons income imagine if it never existed ?
*What do you think someone with a low income would earn?
*What should be their hourly rate of pay?
To freeze it or remove it will only serve to put this country into a deepening recession, a decline in economic activity for years to come.
Remove it, or freeze it at your peril !!
Oh dear … Smart by name but not by nature?
People in hospitality are not even getting minimum wage. Only 80% .And rent council tax hasn’t come down but hey let the poor get poorer.
And yet MP’s are getting a three and a half thousand pay rise as I write this post. It is sickening low paid workers many key workers should have to pay for this crisis . Same old Tories hammering the vulnerable but looking out for themselves.
I worry, if the minimum wage increases my business will fold and all 25 of my employees will have no job. I am sure if you asked whether they want the current minimum wage or no job they would choose, having a job.
Maybe they would find a job that pays a fair wage and not slave labour I’m sure you are earning more than them and they are doing the work to keep your business going. Without them you would have no business.
Pay ratios have widened in UK over last 30 years. You could say this reflects true market values of wonderful CEOs and directors vs low “worth” of more junior workers. Or you could say that the market is rigged; CEOs are better at negotiating and also Board Rem Committees are largely made up of people with a vested interest in high ratios.
Min Wage has been one factor holding back this trend, and very few people who know a Care Worker or cleaner for example feel they are worth less than £10 ph.
Any business that cannot afford to pay min wage shouldn’t be in business.
They would love to abolish it, and have us all working for nothing but benefits, even people who are not mega rich, people who have a medium sized company would do the same to workers who they know personally.
Evil money grabbing bosses would laugh and cry if the Minimum Wage was Frozen.
Ebenezer Scrooge is everywhere.
Im a key worker…working with vunerable adults we are their lifeline to keep their mental health in check. Pre Covid Theyed be out participating in activities. Not the case anymore and the support workers are expected to pick up the pieces. We cook, clean, wash, shop and chaperone to health appts all under Covid…My bills have all gone up…so to even begin to hear that they’ll be no minimum wage increase is shocking., and those challenging need to get a grip and get down off their high horses.
How can you not increase wages for those in the care industry. Recruitment is already a problem and they have worked through this crisis as key workers. That industry needs to be looked after. I agree that some industries like hospitality should not have the increase. After all how can you compare a bar person or someone working at McDonald’s to a mature care worker looking after people with special needs.
Do you think the cost of living for someone working in a bar or McDonald’s is less than for someone in the Care industry? You seem to assume that everyone working the hospitality industry is a student (reference to “a mature care worker”), that is simply not the case. If you have bills to pay you will take a job wherever it’s available. We can’t have a 2-tier minimum wage, that’s ludicrous!
Instead of arguing about who of the deserving poor is more deserving perhaps we should look to MPs who are stopping minimum wage increases while taking a £3.5k increase themselves not to mention the CEO’s and Shareholders who are taking thousands from the backs of minimum wage employees!
My husband works in hospitality and I care for my autistic daughter full time, she needs a high level of care and without the rise in minimum wage we would seriously struggle, we are barley getting by now just about covering our bills, we have no spare cash or wiggle room, my husband worked around 55-60 hours per week over 4 days pre pandemic, so we had an okay income which supported us without the need to claim any benefits and we could afford to replace a washing machine or anything that broke down, decorate the house etcetera, a lifestyle we prefer, we like to pay our own way in life. Post pandemic his wages had just about recovered to a normal level for one month, then hospitality was forced to close at 10pm. My husband works a zero hours job, which means he only gets paid for what he actually works, so the 10pm curfew cut his wages by around 15-20 hours per week. That makes a huge difference to our survival rate, we now have no extra money, we are just surviving. My rate of pay for looking after my daughter is £67.25 per week carer’s allowance. How dare anybody say that anyone’s job is less valuable that anyone else, everybody has a right to earn an honest living and pay their own way in life, but the cut to the minimum wage may end up with families like ours having to end up seeking assistance from the benefit system, either through help with NHS costs, which we now can’t afford, or possibly help to pay council tax or rent etcetera. Surely it’s better to have a pay rise of 38p per hour to help us and families like ours to remain in jobs. A pay rise of 38p for 55 hours worked equals another £20.90 in my husbands pay packet, after tax and insurance comes off, that leaves an extra £14.21 per MONTH in our income, and you think that’s to scrap. In the current climate, that buys my electric for a week. And for the person who said how can you can compare a hospitality or McDonald’s worker to someone working in the care industry, has it not occurred to you, that there are a number of people with special needs, and people whom care for people with special needs working in those jobs too, also what about cleaners, they’ve had their workload increased exponentially, I guess you don’t consider those important enough either. How blinkered and narrow minded are you. Wake up and see reality, everyone is struggling and a pay freeze on top of pay cuts would be disastrous for a lot of families…I do agree that NHS workers should be paid more, but that doesn’t mean other people should be given less or disregarded as not worthy…
What I find really disappointing is that throughout this Key Workers (often on minimum wage) have kept this country going. We all went outside to clap for carers and key workers every Thursday but now there are actually people arguing against giving them a pay increase. I am honestly appalled.
This is the 6th richest country in the world and yet we have families who are so poor they can’t feed their children. Many turn to loan sharks who prey on their vulnerabilities to simply get through the week and so they are living in perpetual debt. It’s easy for someone who hasn’t experienced being dirt poor to say that we should freeze pay for the most vulnerable in our society whilst shareholders, CEOs and MPs give themselves big payouts. In the US there were Congressmen telling the public that they shouldn’t worry about Covid while speculating on the stockmarket in the background making money from it – do you really think that didn’t happen here??
The Elite in this country must be laughing their heads off at the rest of us, arguing about whether someone should be paid an extra 60p per hour – are we actually serious?! If you don’t think people who are paid below the actual living wage should get a basic cost of living increase (which, in case you don’t know, is the % increase THE GOVERNMENT say is how much it has increased to live in this country) then you should be ashamed of yourself!
6th richest country in the world, you must be joking, 3rd world country you mean.
Comments are closed.