The living wage punch up

More than 30,000 are set to get a pay rise of up to £400 a year following an increase in the 'Living Wage'. The Independent reports that Mayor of London Boris Johnston believes that the rise is keeping in line with Thatcherite ideals and the spirit of capitalism.  

Ed Miliband, leader of the Labour Party, is also set to announce tax breaks for firms who pay their employees the Living Wage in order to encourage them to pay the rate which is far higher than the minimum wage. The Daily Mail has reported that this policy has drawn criticism from John McTernan, former aide to Tony Blair who helped introduce the national minimum wage, who suggests that the increase in wages will cause 300,000 young people to lose their jobs.

Max Hastings, in a comment piece for The Daily Mail, echoes this sentiment arguing that by artificially raising wages it will pile costs onto business which in turn will force workers out of their jobs. Hastings makes the claim that only 432 firms out of 5 million are signed up to the Living Wage scheme.   

An editorial in The Guardian claims that the existence of a living wage highlights shortcomings of the statutory minimum wage. It is also claimed that the rise in wages will increase productivity which will encourage employers to maintain wages once the tax break ends and helps the hard to reach group of workers who do not earn enough to pay tax at all.

The Equality Trust produced this info-graphic to help illustrate the National Minimum wage in the UK. To see the image in full size, then please click on the picture.