First of all let’s consider the situation in other countries. Raising the minimum wage to £8 would bring the UK in line with EU countries such as Belgium and Germany. Furthermore it would provide British workers with the same pay as workers on minimum wage in Australia. However it would be a greater minimum wage than in the USA (~£4.44ph) and Canada (~£5.58ph). It seems that the claim that businesses would leave the UK if the wage was increased is simply not true. Especially when countries such as Germany are paying £8ph. Germany is Europe’s largest economy, no businesses are leaving it to come to the UK to take advantage of our lower wage, therefore why keep our minimum wage so low?
Do we actually need to raise the minimum wage? There are not that many people on minimum wage, surely? And therefore raising the minimum wage wouldn’t really help anyone. According to the Low Pay Commission there are actually 1,386,000 minimum wage jobs out there. This is a striking figure and calls into question whether these people can actually live a decent life on £6.31ph. While it has been claimed that people are better off due to low rates of unemployment, there are now more people than ever on minimum wage. According to the Living Wage Foundation, these workers do not make enough to live on and are therefore at risk of poverty despite being employed.
Is a national minimum wage even practical? The Living Wage Foundation argues that it isn’t. The UK is divided; it costs more to live in certain areas. Especially London, which is far more expensive than the rest of the UK. £6.31ph is simply not enough to live on in London. As a result the Living Wage Foundation proposes a different system. They suggest a wage of £8.80 for London and £7.65 for the rest of the UK.
Are there any benefits to businesses paying higher wages? Yes, there are many in fact. For example one independent study found that 80% of workers on the Living Wage (£7.65ph) found it improved the quality of their work. Furthermore employers paying the Living Wage see an average fall of 25% in absenteeism.
Paying a higher wage would benefit the whole of British society. It would mean that workers wouldn’t need two jobs to support a family. It would mean that people would be less stressed and feel valued far more. It would mean that people would have a larger disposable income to contribute to the economy. And it would mean that even the poorest working families out there would be able to feel the benefits of our country’s economic recovery.
Ed Miliband by promising a wage of £8ph is a step in the right direction. However will it be enough? In 2020, the Living Wage may well be over £8ph and it certainly already is in London. Britain does need a pay rise, but Britain also needs a long term plan, so that the minimum wage is always enough to live on.