This is despite concerted claims from the Low Pay Commission and the British Retail Consortium that it is stopping employers from hiring, the TUC insisted this week.
The recently appointed TUC Head of Economic and Social Affairs Nicola Smith – whose department earlier this week highlighted how many carers are earning below minimum levels – said the economic data just does not support the assertions.
Last week the minimum wage for over-21s was increased from £5.93 to £6.08 (an increase of 2.5 per cent) excluding for those who are
self-employed.
The TUC, quoting Low Pay Commission data, said the increase would cost no more than £230 million as tax and national insurance rates rise and is offset by not having to pay benefits.
Ms Smith said that not only had there not been a reduction in jobs as a result of the minimum wage some 890,000 workers, two-thirds of them women, would benefit from being able to rejoin the workforce.
The TUC response came as new research, by the Resolution Foundation using TUC data, claimed as many as
five million people earning above minimum wage are struggling and not earning enough to meet the cost of living – a
so-called “livelihood crisis”.
Experts put the minimum level on which people might be expected to live – modestly enough – at an average of
£7.20 an hour although in London the figure is £8.30 an hour.
Incomes for the top 10 per cent of earners doubled between 1978 and 2008, but by 27 per cent for the bottom tenth, according to recently published TUC figures.
Meanwhile the Institute of Directors, in a 15-point plan for economic growth, insisted this week that the rate of tax for the highest paid – and their businesses – needs to be cut if the economy is to break out of this slump.
The IoD plan, called The Route Back To Growth, calls for the 50 per cent top income tax rate to be scrapped and for corporation tax to be cut to 15 per cent by 2020 (it will go down from 26 per cent to 23 per cent in 2014).
It also wants to see government spending cut by even more than Chancellor George Osborne’s 2016 target of 39.9 per cent of GDP to 35 per cent by 2020.
