TUC calls for new minimum wage

The meeting in early November between the TUC and the Low Pay Commission (LPC), which advises the government on wages, focused on the minimum wage.

The trade union body recommended that the LPC should push to raise the adult national minimum wage (NMW) next year to £6.14 an hour, an increase of 21 pence an hour.

The LPC is currently deciding upon the wage levels for the period between October 2011 and September 2012, and has been told by the TUC that an increase of 3.5 per cent in the NMW is 'sensible and affordable.'

The TUC argues that the 21 pence increase would benefit almost a million workers and help address the gender pay gap, as two in three of those benefiting would be women.

The union also says that a rise in NMW is required to make sure that those workers on low pay do not see their earnings falling behind the rest of the country.

TUC General Secretary, Brendan Barber, said, "The minimum wage has already helped hundreds of thousands of families without any negative side effects.

"Its success has shown that the UK economy can easily cope with sensible labour market regulation that makes life at work fairer. Indeed, the UK's economic problems seem to have been caused by too little regulation rather than too much.

"A rise in the minimum wage is needed to ensure that working families are not left in poverty, and most business organisations now agree that an increase of some sort would be affordable," he added.

So what's going to happen?

It is not surprising that the TUC is calling for big increases in the NMW – it would do, wouldn't it?

However, although the coalition government has confirmed that the NMW is here to stay, it has also sent a strong indication that rises should be kept to a minimum and has opened up the possibility of lower levels of NMW for employees of SMEs.  The new terms of reference set for the Low Pay Commission earlier this year said as much.

In addition, agricultural workers, who traditionally have enjoyed pay protection at levels higher than the NMW, are to be brought within the NMW as part of the government's "bonfire of the quangos".

Finally, although the government's review of welfare payments is pledged to "make people better off in work than on benefits", all efforts seem to be focused on reducing benefit levels rather than increasing wages.

In summary, then, it seems unlikely that the TUC's wishes will be granted when new NMW rates are announced early in 2011.