In its analysis of the recent increase in the minimum wage, the Low Pay Commission has estimated that 8.5 per cent of workers are now on one of the minimum wage rates, up from 7.3 per cent last year.

The Commission’s analysis, published to coincide with increases on 1 April of the National Living Wage and the National Minimum Wage, looked at the impact these have had by home nation and region as well as by specific occupations.

Its key findings include the following

  • The highest proportion of workers set to gain from the increase are in Northern Ireland (12.9 per cent) and the North East (10.8 per cent) compared with London (4.8 per cent), the South East (6 per cent) and Scotland (7.7 per cent).
  • Local authorities with the highest proportion of minimum wage workers are in West Somerset, Torridge, West Devon in the South West, Rossendale in the North West, Boston in the East Midlands and Castle Point in the East of England, where up to 1 in 5 workers are entitled to a pay rise.
  • Half of all minimum wage workers work in just three occupations: retail, hospitality, cleaning & maintenance.
  • Over a third of jobs in hair & beauty and cleaning & maintenance are paid the minimum wage.
  • Workers in the smallest firms are more likely to be paid the minimum wage than those in larger firms.
  • The new rates will raise coverage (the number of workers paid at or below the minimum) from 2 million jobs (7.3 per cent of the cohort) in April 2016 to up to 2.3 million (8.5 per cent) in April 2017. Just over 1.5 million workers were on the minimum wage in April 2015 (5.6 per cent).

Although it is clear from previous research that increases in the minimum wage have not harmed employment, the Low Pay Commission says it is too early to know about the effect of the higher rates of the National Living Wage. It acknowledges, however, that the labour market is still performing strongly overall.

The current hourly rates are: £7.50 for those aged 25 and over; £7.05 for those in the 21 to 24 age bracket; £5.60 for 18 to 20 year olds; £4.05 for under 18s; and £3.50 for apprentices.

Iain Birrell of Thompsons Solicitors said “Britain needs a pay rise. Although this report shows that many low paid workers are getting welcome pay increases, these numbers still show a rise in the number of UK workers being paid just the absolute legal bare minimum.

Without that protection many would undoubtedly get paid even less and it is worth remembering that the National Living Wage is set below the international poverty line – the indicator of the income at which those below are likely to be suffering hardship.

It would be worrying enough that the numbers paid at this poverty rate are growing, but it is even worse when you factor in those employers who fail to pay even that, and the Government’s ‘name and shame’ campaign for minimum wage defaulters shows that this is a constant problem. Whilst pay rises are undoubtedly good for many, it is important to keep an eye on the broader picture.”

To read the report in full, go to: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/604442/A_rising_floor_-_the_latest_evidence_on_the_National_Living_Wage_and_youth_rates_of_the_minimum_wage.pdf

To read the latest ‘name and shame’ list of national minimum wage defaulters, go to: https://www.gov.uk/government/news/record-number-of-employers-named-and-shamed-for-underpaying