Dr Ruth Cain from Kent Law School at the University comments that today’s (1 April 2019) rise in the National Living Wage (or minimum wage, to use its former name) of almost 5% to £8.21 for workers over 25, with younger workers paid significantly less, should, presumably, be welcomed.
‘So why has it been met with disappointment in many quarters? The answer can be briefly summarised in two parts: firstly, the gap between the new higher National Living Wage set by the government and the ‘real’ living wage independently calculated according to housing and other costs; secondly, the overall drop in living standards since the great financial crash of 2007/8.
‘Although 2 million workers will benefit from the rise in the National Living Wage, the ‘real’ living wage remains higher, at £9 per hour and £10.55 in London. An estimated 6 million workers are paid less than this amount and struggle accordingly to pay bills – particularly if, like so many lower paid workers in the care, retail, catering and other ‘service’ sectors, they are under 25.
‘Another major reason why workers across the UK still feel underpaid is that the average real wage is actually lower now than it was ten years ago. This ‘real’ wage is calculated not in pounds and pence alone but in what that amount can purchase year on year. Following the recession in 2008, average wages fell almost consistently in real terms until mid-2014. From 2014 to 2016, inflation remained low and wages increased- but not to pre-recession levels.
‘Now, partly because of increased import costs resulting from the fall in the pound following the 2016 Brexit vote, inflation has risen again. Despite relatively small rises in housing costs compared to the pre-2016 years, food, energy and transport costs have risen significantly. Real wages, although rising, have not kept up with inflation.
‘Thus, the announcement of a 4.9 percent pay rise at the lowest levels, while better than nothing at all, fails to address the twin problems which most afflict lower paid workers in the UK: the persistent gap between minimum wages and rising living costs, and the overall drop in real wages since 2008.’
Dr Ruth Cain
Dr Ruth Cain is a senior lecturer in the University’s Kent Law School and specialises in the study of the law and politics of parenting and maternity. She works primarily in the field of family and mental health law, law and political economy and law and cultural studies.