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£4.3BN YEARLY BOOST TO PAY PACKETS OF LOW PAID FROM NATIONAL MINIMUM WAGE

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Low paid to receive further boost of£640.4m per annum when National Minimum Wages is increased to£5.35 in October...
Low paid to receive further boost of£640.4m per annum when National Minimum Wages is increased to£5.35 in October 2006

GMB tells TUC Congress that a rate of£6 per hour is affordable

A new study, to be released today by the GMB nion at the TUC Congress in Brighton, estimates that the pay packets of the lowest paid in the UK have been boosted to the tune of£4.3bn in the 12 months to end September 06 as a result of cumulative increases in the National Minimum Wage to£5.05 in October 2005. The study also estimates how much these increase boosted the pay packets of the lowest paid in all 12 regions in the UK and counties and boroughs in these regions in the same 12 month period. The figures are set out below.

The National Minimum Wage is due to rise by 30 pence to£5.35 per hour on 1st October 2006. This will boost the pay packets of the lowest paid by an extra£630.4m in the UK as a whole.

The study estimates that in the UK as a whole, a total of 1.3 million workers will benefit from the National Minimum Wage in the coming year. The study also estimates how many in each region will benefit from the National Minimum Wage.

The study estimates that about 40% of the cumulative boost to pay packets from the national minimum wage since its introduction has enabled the lowest paid to keep pace with inflation and the balance has boosted gross incomes in real terms

Below are the estimates by region following last October's increase to£5.05 and the estimates of the additional monies as a result of the increase to£5.35 per hour plus the numbers benefiting for each of the 12 regions of the UK.

Numbers benefiting from October 2006 increase

Money injected into pay packets per annum due to NMW at£5.05 per hour

Extra money to be injected into pay packets per annum in 12 months from October 2006 with NMW rise to£5.35

UK

1,280,000

£4,301,388,000

£630,370,000

North East

67,000

£223,620,000

£32,770,000

North West

160,000

£539,318,000

£79,040,000

Yorkshireand The Humber

110,000

£368,315,000

£53,980,000

East Midlands

98,000

£328,852,000

£48,190,000

West Midlands

129,000

£434,085,000

£63,620,000

South West

106,000

£355,160,000

£52,050,000

East

86,000

£289,390,000

£42,410,000

London

133,000

£447,239,000

£65,540,000

South East

125,000

£420,931,000

£61,690,000

Wales

74,000

£249,928,000

£36,630,000

Scotland

145,000

£486,701,000

£71,330,000

Northern Ireland

51,000

£171,003,000

£25,060,000

Paul Kenny GMB general secretary speaking at the TUC Congress in Brighton said: 'The National Minimum Wage has had a big impact on the incomes of the lowest paid workers in the UK. It has also benefited the economy as there are now 1 million more jobs in the UK.

'The extra 30 pence per hour in October will be a further boost. GMB consider that the Labour Government has scope to raise the rate to£6 per hour. Doing so would renew what has been the 'jewel in its policy crown' and would help to reconnect the party to its core voters.

'The national average hourly pay now stands at£13.10 per hour. The new minimum rate of£5.35 is just over 40% of that. A large slice of the increases since 1999 have been to keep up with inflation. Raising the National Minimum Wage to£6.00 per hour would add£3.1bn per year to the pay packets of the lowest paid for the UKas a whole. When compared with last year's increase in bonuses from£19bn to£21bn to some thousands of City of London fat cats this is an affordable amount.'

Notes

1. The main rate for workers aged 22+ is currently£5.05 per hour and on 1st October 2006this will increase to£5.35. The previous National Minimum Wage rates for workers aged 22+ were:£4.85 - from 1st October 2004;£4.50 - from 1st October 2003;£4.20 - from 1st October 2002;£4.10 - from 1st October 2001;£3.70 - from 1st October 2000£3.60 - from 1st April 1999

2. The rate for workers aged 18-21 is currently£4.25 per hour and on 1st October 2006this will increase to£4.45. The previous National Minimum Wage rates for workers aged 22+ were:£4.10 - from 1st October 2004;£3.80 - from 1st October 2003;£3.60 - from 1st October 2002;£3.50 - from 1st October 2001;£3.20 - from 1st October 2000;£3.00 - from 1st April 1999

3. The rate for workers aged 16-17 is currently£3.00 per hour and on 1st October 2006this will increase to£3.30. This rate was introduced at£3.00 per hour on 1st October 2004.

4. Official 2005 Annual Survey of Hours and Earnings1 (ASHE) data from the Office for National Statistics (ONS), Table1: All employees and Table 8: Place of residence by Local Authority; Distribution of low paid jobs by 10p bands and jobs paid below minimum wage by category - 2004 methodology from the Office for National Statistics Low pay estimates2; 2002 and 2003 New Earnings Survey analyses by region, county and small areas based on home postcodes3 ;Table 2.4: Estimates of jobs benefiting from the October 2005 National Minimum wage rates and table 2.7: Estimates of jobs benefiting from the recommended October 2006 National Minimum wage rate from the Low Pay Commission report 20064

1 www.statistics.gov.uk/StatBase/Product.asp?vlnk=14203

2 www.statistics.gov.uk/StatBase/Product.asp?vlnk=5837

3 www.statistics.gov.uk/StatBase/Product.aspvlnk=5753&Pos=2&ColRank=2&Rank=576

4 www.lowpay.gov.uk/lowpay/rep_a_p_index.shtml

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