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Wales Online
National
Joe Harker

What impact will the minimum wage increase have for workers?

The minimum wage is due for a significant increase in April, with the lowest amount a person over 25 can be paid going from £8.21 an hour to £8.72.

Boris Johnson has claimed he is giving people on the minimum wage the "biggest ever cash boost", arguing that "hard work should always pay".

What impact will the minimum wage rise have for British workers and what changes will it make?

The Claim

The planned increase of 51 pence to the minimum wage represents a boost of over four times the rate of inflation.

For people on the minimum wage, an increase is going to mean more money in their pockets and that can be no bad thing. 

Many people are struggling to make ends meet as weak wage growth has triggered a cost of living crisis, a significant jump in the amount of money they make each hour will help bring them above the breadline.

TUC general secretary Frances O'Grady said a rise in the minimum wage was "long overdue", though said employees were still not getting their fair share.

Sajid Javid, chancellor of the exchequer, said he eventually wanted to raise the minimum wage from 60 per cent of median earnings to 66 per cent and drop the age a person receives the standard rate of minimum pay from 25 to 21. 

The Counter Claim

However, the government's increase will do little to help the quarter of would-be minimum wage workers over 25 who aren't even being paid the lowest legal amount. 

The BBC reports that one in four workers who should be on the minimum wage are actually being paid less, an increase on the rate of one in five back in 2016.

The government wants to crack down on employers underpaying their workers but the rising rate of underpaid employees suggests they are struggling to keep up with it.

A stronger crackdown on underpaying employers is recommended by the Resolute Foundation, the think tank whose research found that a quarter of minimum wage employees were being underpaid.

HMRC identified 1,456 firms in the 2018-19 fiscal year that were underpaying staff and issued fines of £14million, the most they have ever had to dole out. The practice of naming and shaming underpaying employers was phased out in recent years.

There are too many companies in the UK not taking the minimum wage seriously and the attempt to help the poorest working people by increasing it will be undermined as long as businesses can get away with underpaying their employees. 

The Facts

There are almost three million workers in Britain on the minimum wage who are in line for a pay rise on April 1.

The increase of 51 pence per hour will result in a minimum wage worker in a full time job earning around £930 more a year.

Rebranded as the "national living wage" in 2016, the minimum wage increases at different rates depending on the age of the employee. 

Those who are 25 and over will get a 6.2 per cent increase taking them to £8.72 an hour, whereas 21-24 year olds will be receiving a 6.5 per cent increase that takes their hourly earnings to £8.20.

For those aged 20 and younger the minimum wage is significantly lower. 18 to 20 year olds will see their minimum wage rise by 4.9 per cent to £6.45 an hour, while under 18s will get a 4.6 per cent increase to £4.55 an hour.

Apprentices have the lowest minimum wage, which will rise by 6.4 per cent to £4.15 an hour.

The government has a further plan to increase the minimum wage to £10.50 an hour in 2024, though they have said that will only happen "provided economic conditions allow" for another rise. 

The 2010s have been one of the worst decades for pay growth in two centuries, while the average pay packet across the UK is lower than it was before the 2008 financial crisis once inflation is taken into account. 

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