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Wednesday, March 31, 1999 Published at 23:37 GMT 00:37 UK


Business: The Economy

£3.60 and not a penny less

For 1.9m UK workers, 1 April is a memorable pay day

For the first time in history, UK workers are guaranteed a minimum wage.

Minimum wage
New government legislation, in force from 1 April, sets a national minimum wage level of £3.60 for workers aged 22 years and older and £3 for those aged 18 to 21 years.

On Wednesday Prime Minister Tony Blair hailed the law as a "pay rise" for nearly two million low-paid workers in the UK. The introduction of a national minimum wage was a pledge given in Labour's election manifesto.


Stephen Evans reports: "Not a tremendous sum"
One man playing a key role in drafting the new legislation, Trade and Industry Minister Ian McCartney, knows all about low pay. When he was a young chef, he was sacked on the spot after asking his millionaire boss for a £1 a week pay rise.

At the time Mr McCartney was earning just £7.35 a week working up to 13 hours a day. Looking back he said: "It taught me a lesson about low pay and I made up my mind to do something about it."

Pay enforcement

The Chairman of the Low Pay Commission, George Bain, said the new pay levels heralded a "fundamental change" to the country's labour market.

"There will be a floor to wages for the first time in this country, eradicating the worst cases of exploitation".


[ image: Many companies say they will pay their workers £3.60 regardless of age]
Many companies say they will pay their workers £3.60 regardless of age
A government body will ensure that employers pay the new wage levels. Illegal sweatshops, though, may be able to escape the dragnet of law enforcement.

Before the introduction of the minimum wage, about 1.9 million people - or 8.3% of the UK workforce - were earning less than the new mandatory pay levels, according to figures from the Office for National Statistics.


Stephen Evans reports: "An increase in wages of about £30 per week"
A survey compiled by the Labour Research Department of the GMB union, however, shows that many large employers have decided to pay all their workers a minimum of £3.60 each, regardless of age.

The union says the 60p difference will amount to about £24 a week and would be "vital" to young workers of companies like McDonalds, Burger King, Barclays, WH Smith, Marks & Spencer and many others.

Job killer or creator?

The government insists that the new wage levels will have little or no effect on employment, despite the higher wage bill many companies have to bear.

Some economists have suggested that the measure could cost up to 80,000 jobs during the next two to three years.

However, a survey published this week by Income Data Services suggests that many low-pay industries are not deterred by the new wage levels from expanding their business and creating new jobs.



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31 Mar 99 | The Economy
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