Does the UK’s fast-rising minimum wage mean it’s mission accomplished on low pay?
Having surged from £3.60 an hour in 1999 to £10.42 today, our wage floor is now among the highest in the world. Rapid increases since the national living wage’s 2016 introduction have slashed the proportion of “low paid” employees (earning below two-thirds of the typical hourly wage) to 9% (versus 21% in 2015), the lowest in more than 50 years.
This is what real progress looks like, but it is not mission accomplished, because lower earners may have higher wages but still too often lack something else: good work.
We’ve chosen as a country to give low earners little or no protection from unexpected changes to the hours or shifts they work. The result? Four times as many of them experience volatile hours (and therefore pay) as higher earners. Try paying the rent with that insecurity.
And when life gets difficult, lower earners’ incomes take a hit in a way higher earners almost never experience. The majority of those earning less than £20,000 a year tell us that if they have to miss work for a family emergency, such as a sick child, they won’t be paid.
And if they get sick themselves it’s terrible for their financial, not just physical, health. If I can’t work I get paid in full, but we’ve chosen to leave lower earners with disgracefully low sick pay: if you’re sick for one week you are left with £43.76 to live on because you’re not paid for the first three days.
Even as the minimum wage has risen, lower earners’ work has become more intense and their job satisfaction has fallen. Good work is the mission but, with next to no progress beyond raising the minimum wage, it’s very much not one we’ve accomplished.
• Torsten Bell is chief executive of the Resolution Foundation. Read more at resolutionfoundation.org