Progress | Centre-left Labour politics

Learning from the National Minimum Wage Act, 20 years on

The 20th anniversary of the National Minimum Wage Act provides an opportunity to consider how we can tackle our current low pay crisis

The National Minimum Wage Act brought about enormous changes across the country. As a result of the legislation, over one million workers received a pay rise of 10 to 15 per cent on average. The Act was also fundamental in ensuring a much greater public focus on low pay. A widespread advertisement campaign ensured that workers were aware of their new rights and, for the first time, all employers could be taken to task for underpaying their employees.

Over the past 20 years, we have seen a significant increase in insecure work across the economy. Many workers are now regularly working additional overtime which their employer refuses to guarantee as part of their contract. Due to the precarious nature of their working hours, and subsequently their pay packets, workers are unable to properly plan their finances resulting in unnecessary stress and anxiety. We are also aware that, far too often, local managers will use the threat of removing someone’s hours as a disciplinary tool rather than following a robust disciplinary process.

I am pleased to see that this year the Low Pay Commission is looking at the issue of insecure work and how this can be addressed. Usdaw is campaigning for all workers to be given a right to be offered a contract based on their normal hours of work. We also want workers to have the right to a minimum contract of 16 hours per week unless the individual specifically requests a shorter contract.

The most significant change in the National Minimum Wage over the past 20 years was the introduction of the so-called ‘National Living Wage’ in 2016. While the significant increase in the rate for those aged over 25 was welcome, the clear intent was to cushion the blow of cuts to the welfare state, rather than deliver improvements for low paid workers. Yet, at the same time, George Osborne created further age discrimination in the regulations by introducing a lower 21-24 year old rate.

Usdaw has long campaigned against youth rates and has been successful in negotiating the removal of such rates across many of our agreements. These employers agree that their employees deserve to be paid the same irrespective of age. Unfortunately, young workers in large parts of the unorganised labour market continue to be disadvantaged as a result of their age. Usdaw firmly believes that all adult workers should be paid the same rate of pay and we continue to push for the removal of age related pay bandings.

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At the same time, we need to ensure that individuals are paid an hourly rate which enables them to have a decent standard of living. Usdaw’s evidence shows that 46 per cent of our members are not confident that their job will provide them with the income they need over the next 12 months. With figures showing that 60 per cent of the UK population who are in poverty are working and that more than half of the UK’s homeless families now have someone in work, the evidence is clear – the current National Minimum Wage is no longer providing an adequate income to survive. For this reason, Usdaw is campaigning to increase the National Minimum Wage to £10 per hour.

The National Minimum Wage was a revolutionary piece of legislation. It changed the lives of millions of people. Only by updating it for the modern world can we preserve its legacy.

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Paddy Lillis is general secretary of Usdaw

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Paddy Lillis

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