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Government planning to freeze or cut minimum wage

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As the Conservatives pile into several new fronts with their perceived war on the poor, it has come to light that they have now leaned on the Low Pay Commission, which sets the minimum wage, that it must formally consider its impact on “employment and the economy”, before raising the minimum wage in line with inflation.

This hoary old right wing argument was the sticking point against the introduction of a minimum wage, and it seems that it is now being trotted back out to keep it as low as possible. What was it the government was saying about benefit cuts? That they are being introduced in order to push people back towards work where they would be supported? This tells a slightly different story for the low waged.

The spectre has now been raised of the first ever freeze or indeed cut in the minimum wage. The national minimum wage is established in law and is traditionally announced in March every year by the Commission, after negotiations with employers, unions and the Government.

The rate increased from £6.08 to £6.19 for those aged over 21 last October, but the hourly rate employees aged 18 to 20 were frozen at £4.98.

Note that the minimum wage is far less that the ‘living wage’ (estimated to be £7.45) already and future cuts to it could further consolidate an economic underclass. Basically, what the government are trying to do is insert a large caveat into the Low Pay Commission’s terms of reference that effectively states that ‘the understood and accepted goal to raise the wages of the lowest paid without damaging employment or the economy’. That is obviously quite an vague and arbitrary state of affairs.

Matthew Hancock, the business minister, said there is “evidence that in these tough economic times the minimum wage level may have an impact on the employment opportunities” of young people.

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