Call to raise minimum wage to £6.94

The government should have a minimum wage target of £6.94 an hour and create a powerful watchdog to help workers escape low pay, according to the conclusions of an inquiry chaired by Sir George Bain, one of the original architects of the UK statutory national minimum wage.

The inquiry's final report was published on the day the coalition government announced the minimum wage would rise by 19p – or 3 per cent – to £6.50 an hour and signalled there would be bigger increases in future years.

Key recommendations

  • There should be a 'fundamental overhaul' of the minimum wage. The cautious approach of the late 1990s was right for its time, but it is now 'too narrow, short-sighted and passive' to dent today’s wider problem of low pay.
  • The Low Pay Commission should be turned into a powerful new watchdog on low pay. This would mean the Commission going well beyond the narrow role of setting the minimum wage to support a new long-term government ambition to lift one million workers out of low pay.
  • The government should set out its ambitions for the minimum wage over the medium term. A minimum wage worth 60 per cent of median hourly earnings would be a 'challenging but realistic' goal.
  • The Commission should publish analyses showing whether certain sectors could afford to pay more than the minimum wage. It should also publish a minimum (initially non-mandatory) wage rate for London.

Professor Sir George Bain, chair of the review, said: 'Leading thinkers on left and right have argued in recent months that the minimum wage should be strengthened. This report sets out what that would mean. We think the core of the current settlement should be retained, but that we should build on this success a broader, more far-sighted and more assertive approach'.

SourceMore Than a Minimum: The Resolution Foundation Review of the Future of the National Minimum Wage – The Final Report, Resolution Foundation
LinksReport | Resolution Foundation press release | York University press release | Guardian report

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Publication date: 
Mar 12 2014