In Britain, like in many European countries, there is a minimum wage. Based on a standard working month, it equates to €1,378.87 (for that month). Comparatively, in France, it is €1,457.52. In fact, Britain has a lower minimum wage than many developed economies in Europe – lower than Belgium, Ireland and Germany. However, in spite of this, the cost of living in the United Kingdom is drastically higher (on average) than the cost of living in any of these countries. These two statistical realities lead to another: pay compared to costs of living is lower in the UK than in almost a quarter of world countries. This would appear to be insanity – the UK is one of the wealthiest nations in the world.
This is before we even consider the cost of living in London, which is dramatically higher than the rest of the country, and was recently ranked the most expensive place to live in the world. It is this fact that has prompted some politicians and media outlets to term the minimum wage ‘a starvation wage’. The assertion is supported by facts: for the first time ever, more people receiving state benefits are in in full time employment than not.
Outrage at the issue of minimum wages is not new. In 1909, a politician declared, somewhat controversially, it was a “serious national evil that any class of His Majesty’s subjects should receive less than a living wage in return for their utmost exertions”. The politician’s name was Winston Churchill, and his point fell, to some extent, on deaf ears. In 2015, over a century on, we still have not yet implemented a living wage. But at long last, it is coming.
Some six million workers will benefit from the rise. The new National Living Wage will apply to those over the age of 25 and will be £7.20 a month. It will be introduced in April 2016 and represents a gargantuan rise compared to the £6.70 minimum wage that will be introduced next month.
Criticism
The policy has unsurprisingly received massive support from workers and trade unions, but it isn’t without it’s critics. A notable figure in the Business world, Justin King (former Chief Executive of Sainsbury’s) described the new rate as “ludicrous” and claimed it would “destroy jobs”. Others have also expressed concern: Frances O’Grady, secretary of the TUC, suggested that there was a genuine risk that limiting the new wage to over 25s would mean older workers would be replaced with younger employees in an effort to be more economical.
The government hit back at the criticism, stating the living wage would be a move towards a society with fewer dependants on social security. Whilst the cost of housing, particularly inside cities like London, is still soaring, I can’t help but think that more should be done than simply introduce a higher minimum pay level. However, the introduction of the living wage will make a huge difference to a huge amount of people. If a person works hard, it seems the least they are owed is sufficient pay to survive upon.
What do you think? Will the living wage help or hinder? Have your say in the comments below.
