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:
- National minimum wage 2009/2010: 1.2% increase to £5.80 per hour announced for October 2009 The Government has announced the national minimum wage rate for 2009/2010. With effect from 1 October 2009, the national minimum wage adult rate (paid to workers aged 22 and over) will rise from its current level of £5.73 per hour to £5.80 per hour, an increase of 1.2%.
- Low Pay Commission to consider national minimum wage for apprentices
- National minimum wage 2009/2010: TUC warns against minimum wage freeze The TUC is warning against a freeze in the national minimum wage, arguing that this would result in pay growth for low-paid workers falling behind that for the rest of the rest of the working population.
- National minimum wage 2009/2010: 0.7% rise to £5.77 per hour rumoured for October 2009 The Guardian reports that it is rumoured that the national minimum wage adult rate will increase to £5.77 per hour from 1 October 2009. This represents an increase of 4p per hour from the current national minimum wage of £5.73 per hour.
- National minimum wage 2009/2010: announcement expected "week beginning 11 May 2009" The announcement of the level at which the national minimum wage is to be set for 2009/2010 - coming into effect from 1 October 2009 - is now expected to be made during "the week beginning 11 May 2009". This is according to a representative of the Low Pay Commission (LPC) (external website), speaking to XpertHR on Friday 24 April 2009. It would consequently appear that a low or zero increase to the national minimum wage is ever more likely.
- 2009 national minimum wage increase decision delayed The government has announced that the reporting deadline for the Low Pay Commission's (LPC) recommendations on the October 2009 national minimum wage increase has been extended by two months, to 1 May 2009. This suggests that a low or zero 2009 national minimum wage increase is likely.
- BCC calls for national minimum wage freeze in 2009 The national minimum wage should not be increased at all come October 2009, according to the British Chambers of Commerce (BCC).
- TUC calls for £6.10 minimum wage In its submission to the LPC, the TUC has recommended that the national minimum wage from October 2009 should be at least £6.10, and says it should be increased to more than £6.50 from October 2010.
- National minimum wage enjoys broad support In the 10 years since its introduction, the national minimum wage has gained wide acceptance among employers, according to the latest IRS research on views of the national minimum wage.
- Does your organisation carry out an annual pay review in October? If so, and if it has now been settled, please get in touch so that we can add your organisation's pay award to the IRS database.
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Comments (14)
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)?
Posted by Anonymous | October 15, 2008 7:57 AM
Posted on October 15, 2008 07:57
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
Posted by Anonymous | November 14, 2008 10:52 PM
Posted on November 14, 2008 22:52
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
Posted by miss s.oshea | December 28, 2008 5:40 PM
Posted on December 28, 2008 17:40
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
Posted by Michael Carty
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December 29, 2008 6:28 AM
Posted on December 29, 2008 06:28
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.
Posted by juliet | January 18, 2009 12:45 AM
Posted on January 18, 2009 00:45
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 .
Posted by tigger | February 11, 2009 9:18 PM
Posted on February 11, 2009 21:18
So what do will the likely minimum wage be as of October 2009?
Posted by Lauren | February 28, 2009 10:31 AM
Posted on February 28, 2009 10:31
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
Posted by Michael Carty
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February 28, 2009 12:28 PM
Posted on February 28, 2009 12:28
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.
Posted by Robert Reeder | March 7, 2009 12:25 PM
Posted on March 7, 2009 12:25
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.
Posted by John Clifford | April 1, 2009 12:39 AM
Posted on April 1, 2009 00:39
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.
Posted by chris | April 6, 2009 12:31 AM
Posted on April 6, 2009 00:31
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.
Posted by Anonymous | April 11, 2009 4:14 PM
Posted on April 11, 2009 16:14
@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
Posted by David Shepherd | April 12, 2009 11:16 AM
Posted on April 12, 2009 11:16
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
Posted by Anonymous | May 5, 2009 9:04 AM
Posted on May 5, 2009 09:04