
In a 2012 article, Jo Haigh suggested that we are not in the same economic times as we were in 1999 when the national minimum came in. And it still stands relevant today.
“Huge numbers of British firms are struggling with profitability, struggling to even stay afloat,” she said. “While increases of nearly ?1 an hour might not sound much, rounded up with employers national insurance across the board for many a company, it could undoubtedly tip them into loss making situations ? and loss making situations make for job losses. “Equally, we are living in an age where employers have to freeze wages year in, year out to combat the recession, and having one group at the bottom with enforced rises can also work against the very motivation the campaign is supposed to induce. By heightening some wages at the bottom, it does not preclude that wages across the board will be heightened, only that more people will be paid more similarly, giving less incentive to progress from the bottom rung. That in turn will do damage to companies who might otherwise yet ride out these grim times.” Simply put, there was and still is a problem with the living wage. Up and down the country, more than 5m people get paid less than the living wage, with Birmingham Northfield toping the list of living wage blackspots. In Northfield 53.4 per cent of people working there earn less than ?7.85 an hour, followed by Kingswood near Bristol (51 per cent) and Dwyfor Meirionnydd in North Wales (50.9 per cent). TUC general secretary Frances O’Grady said: ?Working families have experienced the biggest squeeze on their living standards since Victorian times, and these living wage figures show that women are disproportionately affected. Pay has been squeezed at all levels below the boardroom, and the government’s mantra about ‘making work pay’ is completely out of touch with reality.” Read more about:- Chelsea becomes first Premier League club to sign up to living wage scheme
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- The problem with the living wage
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