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Much too little, much too late

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Issue 1684

Minimum wage

Much too little, much too late

NEW LABOUR has been forced into a retreat over the minimum wage in a desperate attempt to head off a rebellion from its backbench MPs. But the government has done too little, too late. Gordon Brown has announced a rise of just 10p an hour in the minimum wage rate for over 22 year olds-from 3.60 to 3.70.

No one will receive the miserly increase until next autumn. Because the uprating has been delayed it is less than the rate of inflation and less than half the average increase in earnings. The lower rate for 18 to 21 year olds will increase by 20p an hour to 3.20 an hour in June. New Labour boasts about being a “family friendly” government. But how does it help family life to keep people on such poverty wages?

A 21 year old working a 38 hour week, for example, will get just 122 a week before tax after the new rise. Yet many 21 year olds have young families to support, household bills to pay and transport costs to meet like other workers. Gordon Prentice, the Labour MP who was organising a potential rebellion by Labour MPs, criticised the government. He said it had not gone far enough. Prentice and other Labour MPs were demanding the government automatically raises the minimum wage every year.

But Tony Blair has made it clear he does not support an automatic rise. New Labour’s minimum wage does not come close to the 5 an hour rate, approximately half of average male earnings, demanded by many trade unions. The government claims that the effects of the minimum wage on jobs still have to be assessed. But even the CBI bosses’ organisation and the Tories have had to admit that the minimum wage has not led to a rise in unemployment.

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