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Battle-lines drawn for the 2009/2010 national minimum wage increase

Just two weeks after the October 2008 national minimum wage increases came into effect, attention is already turning to the 2009/2010 increase. And discussions surrounding the 2009/2010 national minimum wage increase could once more become heated. 

Update - May 2009: New rates for October 2009 now announced.

The last two years of "cautious" increases (subscription required) in 2007 and 2008 have been accepted with a minimum of fuss by employers and unions.

But the present economic context of stagnating growth and elevated inflation is likely to result in divergent priorities when it comes to deciding the level of the October 2009 uprating (to span the remainder of 2009 and most of 2010), which the Low Pay Commission is scheduled to announce in the Spring.

The British Retail Consortium's (BRC) October 2008 submission (PDF format, 186K) (external website) to the Low Pay Commission on the 2009/2010 national minimum wage increase points to the tough trading conditions currently affecting the sector. Consequently, the BRC suggests that:

[F]uture increases should fall on the lower side of average earnings. For 2009 we believe this means an increase around 3%.

In contrast, a spokesman for shopworkers' union Usdaw interviewed for our recent overview of retail sector reward trends (subscription required) said that the union would push for the national minimum wage to be increased to more than £6 per hour in October 2009. This represents, by my calculations, an increase of at least 4.7% to the current adult statutory pay floor (subscription required) of £5.73 per hour.

UPDATE: The following links provide more detail on subsequent developments relating to the 2009/2010 national minimum wage increase:

Michael Carty | |

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Comments (14)

Anonymous:

We need to do some zero-sum budgeting and look at our value proposition - to customers and employees.

I was served by a 16 year old at ten o'clock one night. He earned 3.40 an hour. That is as immoral as selling a mortgage to someone who can't pay it back.

This call my go beyond your purview.

I am interested in the wage curve. What system is typically used to describe the progression of wages in firms/industries? Assuming an X/Y graph with pay on the Y axis, how are levels on the X axis defined and what is the typical increase from level to level (by industry)?

Anonymous:

It should be set at least £6 from £2009 - if it increases again by 21p it will only be £5.94 which is pathetic, I think at least £6 - £6.10

hello my name is stacey oshea, i am 19 years old and i am starting a new job in the equine industry as from jan 2009. i have been told my pay will be around £228 a week to brake it down i will be on £4.77 an hour could you tell me if this is the correct minimum wage or under for my age and the area which ill be working in and as i have many qualifications and experience in this department. as i feel from working a 48 hour week this is not enough money.

i will look forward to hearing from ur reasponce.
thanks x

Michael Carty Author Profile Page:

Hi Stacey

I'm pleased to be able to tell you that your new employer is planning to pay you the correct national minimum wage. From 1 October 2008, the national minimum wage development rate (for 18 to 21 year olds) rose to £4.77 per hour (see: http://www.xperthr.co.uk/article/21415/national-minimum-wage.aspx).

All the best for the new year and for your new job!

Michael Carty

juliet:

hey, i am 17 and i dont understand why those who are older are able to earn more money doing the exact same job you are doing, i do not believe in age discrimination when it comes to wages and think that this is very unfair. basically cheap labour.

tigger:

thought you might like to know the great Arcadia company has decided to defer annual pay rises from April 2009 to September.As aworker of ten years experience, as of October if there is a minimum wage increase i will be on the minimum wage the same as a new Saturday worker .

Lauren:

So what do will the likely minimum wage be as of October 2009?

Michael Carty Author Profile Page:

Thanks for your question, Lauren. We won't know for sure until the Low Pay Commission announces its recommendation on 1 May 2009, but a low or zero increase seems highly likely: http://www.xperthr.co.uk/blogs/employment-intelligence/2009/01/2009-national-minimum-wage-inc.html

Robert Reeder:

Having had to work for the Minimum Wage for some years now it is very down turning for all, but why do the Minimum Wage workforce of this Country have to wait until October to get this Vital Increase in basic living. why cant the Minimum Wage be increased in April to cover the basics like rent and Council Tax Increases when these taxes go up Every Year and we have to wait and struggle until October every year to get this pitiful few pence extra.

John Clifford:

As an employer of 4 people (a small retail shop)I have to say that my business is struggling to maintain the minimum wage and if it goes to £6 in October I will be forced to not employ any staff, also I think the government should supplement the incomes of small businesses as the number of hours I work I am on much less than the minimum wage. Due to the nature of my business I do have to employ some staff (I already work 60 hrs a week) and it is not great when sometimes I can not afford to pay myself.

chris:

Whilst the current climate is not good for employers and employees alike, I do not think it is fair to consider freezing the minimum wage. The price of living has gone up, and people earning the minimum wage already have little allowance for luxury items, a zero increase may force some people out of their homes. Considering that the credit crunch was not caused by prudent individuals such as myself,who avoid debt like the plague, I do not see why we should be made to suffer further.

Anonymous:

i work at a local shop in my hometown, iam 15 so understand that im not intilted to the minium wage, but i do have my national insurance number,at the time being iam only recieveing £18 for 6 hours of work which includes heaving lifting,which means im only getting £3 an hour,the person i work with is over 16 and does 9 hours a day, she is only recieving £28 for 9 hours, this means she is only getting £3.80 on hour, which is way below what it says is the minium wage, i wonder what action i can take to insure that me and my workmates are getting paid the right amount each week.

@anonymous, aged 15 - there is an official minimum wage helpline for employees, run by HM Revenue and Customs. They should be able to answer your questions. The number is 0845 6000 678 and it is open from 9 to 5 on Monday to Friday. You can also see more advice and guidance on this page

Anonymous:

PLEASE PAY CARE WORKERS MORE MONEY THAN THE MINIMUM WAGE IT IS VERY HARD WORK MENTALLY AND PHYSICALLY AND ALL WE GET IS THE MINIMUM WAGE FOR VERY LONG HOURS TO MAKE SOME MONEY ALSO NURSES NEED TO BE PAID MORE MONEY TOO THEY WORK EXTREMELY HARD AND SAVE PEOPLE PLEASE PLEASE LOOK AT WHAT WE GET PAID THANKYOU

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