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Inflation Has Killed The Minimum Wage, Says Its Chief Architect


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http://www.independent.co.uk/news/uk/politics/inflation-has-killed-the-minimum-wage-says-its-chief-architect-8737169.html

The national minimum wage is no longer working because its value has fallen, one of its key architects said as a new study showed it could be worth less in 2017 than it was in 2004.

The landmark measure, introduced by the Blair government 15 years ago this week, has dropped in value in real terms in the past five years after being pegged to wages, which have not kept pace with inflation.

Professor Sir George Bain, the first chairman of the Low Pay Commission which recommends the level of the minimum wage each year, told The Independent a “fresh approach” is needed because it is not addressing today’s problems. He believes the priority is to help the 3.6 million people who are above the legal minimum but below the “living wage” needed for a basic standard of living. That is paid voluntarily by about 250 employers and is worth £7.45 an hour, or £8.55 an hour in London.

The minimum wage is currently set at £6.19 an hour and covers 1.1 million workers. It has usually risen in line with median pay, which has fallen behind inflation in recent years.

The study by the Resolution Foundation, a think tank campaigning for better living standards for the 15 million people on low and middle incomes, predicts the legal floor would rise to £7.12 an hour in 2017 – the equivalent of £6.12 an hour in today’s prices and less than the £6.33 an hour it was worth in 2004. The prediction is based on Office for Budget Responsibility (OBR) forecasts for wage growth. The foundation says that would mean “13 lost years” in the fight against low pay.

Professor Bain said that from its launch in 1998 to 2007, the minimum wage abolished the worst excesses of low pay but struggled to help the group earning less than the living wage.

Hilarious really I suppose increasing the minimum wage will relieve the poverty...... ignoring the problem that this distorts the market and is actually increasing poverty and the minimum wage may have undermined purchasing power increasing poverty.

Still I reckon if we could make the minimum wage £1m per hour this time next week we'll all be millionaires and poverty will have been eradicated....

Still he's an expert and he'll know better than anyone how to fix the problem.

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No shit sherlock. That idiot new Arch Bishop of Canterbury said something similar the other day before he made himself look even more of an idiot than he did before about the Wonga thing. What these clowns don't get is that they should be blaming the BoE and government for creating so much inflation and directing their anger in regards to that back to the people who made it happen.

Edited by Spoony
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