TUC calls for overhaul of minimum wage rates

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The TUC is calling on the Government to raise the national living wage to £10 “as quickly as possible” and to make national minimum wage rates fairer for younger workers and apprentices.

It comes as a report published today by the European Trade Union Confederation (ETUC) shows that current minimum wage rates across Europe, including the UK, are failing to lift workers out of poverty.

When the former chancellor George Osborne announced the introduction of the national living wage, the minimum wage for workers aged 25 and over, he pledged that it would reach 60% of median earnings by 2020.

In 2015 that commitment had expected to deliver £9 per hour by the end of the decade, but low earnings growth means that on current trends the national living wage will rise to just £8.40 by 2020.

The TUC is also concerned that younger workers are getting left further behind, since the national living wage – currently £7.50 – only applies to those aged 25 and above. Those aged 21 to 24 have a minimum rate of £7.05, while 18- to 20-year-olds are only obliged to be paid £5.60 per hour.

The TUC has also called for:

  • the age at which workers are paid at least the national living wage to be lowered from 25 to 21 years old;
  • the apprentice rate – currently £3.50 an hour – should be raised to the same level as under 18s  (£4.05 an hour);
  • the apprentice rate should only apply to those undertaking intermediate level apprentices who are aged 16-18 and to 19- to 20-year-olds in the first year of their apprenticeship. Other apprentices should receive the standard rate for their age group.

TUC general secretary Frances O’Grady said: “The minimum wage needs a serious boost in the coming years. Millions of people are living in poverty despite being part of working households.

“Younger workers deserve to be treated fairly. It’s not fair that young adults are getting less pay than their colleagues for the same work. They face the same living costs.

“This new campaign by the ETUC is much needed. Poverty pay has no place in the UK or anywhere in Europe.”

ETUC confederal secretary Esther Lynch said “Minimum wages are far too low. The EU should set a Europe-wide target for increasing minimum wages. This would encourage governments to discuss with trade unions and employers how to achieve fairer minimum wages.

“Raising the minimum wage to a decent level would greatly reduce poverty in every EU country and help drive economic growth.”

The TUC’s evidence to the Low Pay Commission, the independent body that advises the Government on the minimum wage, also contains numerous recommendations for the improvement in enforcement of the national minimum wage.

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