Apr 25, 2016
It might have been an April Fool’s joke, but it wasn’t one. Prime Minister Cameron’s administration scrambled to announce an increase of almost 11% in the minimum wage starting on April 1. But it wasn’t what it seemed.
There isn’t an across the board increase in the minimum wage, but the creation of a fifth, higher rate, which will be added to the four other minimum wage rates. The first swindle is that the new rate is set at $10.40 an hour, and applies only to workers 25 and over. The others have to be content with the old rates, which remained unchanged and much lower, between $4.75 for apprentices of all ages and $9.38 for workers between 21 and 24.
To mask this sleight of hand, Cameron calls this the reference wage (not even a minimum!) which is given the name of the “National Living Wage”.
This is the second deception. For with such an hourly wage, even with a full time job, workers need a lot of overtime to pay their bills, especially with high rent and electricity costs in the big cities. And now those getting the National Living Wage will have to pay income tax, which has never been the case with the minimum wage.
Finally, the third deception is pretending that this measure helps poor workers. Workers under age 25 will face a good chance of losing their job as they hit 25. Most of those 25 years and over who already have a stable job will get nothing extra because with a little seniority and skill, their pay is already higher. Those not in this situation will continue to have a hard time, maybe worse than now, because they’ll be competing with younger workers. There are the Zero Hour contracts with no guaranteed paid hours in a week. Even with the minimum wage increase, such low hours don’t provide enough to live. Self-employed workers get no minimum wage, which explains why more than a third of the 4.9 million of the self-employed are poor.
While the bosses are crying bloody murder about the increase in the minimum, they are mostly prepared for the new situation. There was a reason that in the period before the introduction of the National Living Wage, the share of self-employed jobs more than doubled to 26% of all employment!