Labour plans for NMW

A link between the National Minimum Wage rate and median earnings will be established under a Labour government, Labour leader Ed Miliband has announced.

The proposal is one of the key recommendations made by Alan Buckle, the former deputy chair of accounting firm KPMG International, in an independent report on low pay commissioned by the Labour party.

The policy commitment would require the minimum wage to be brought up to a fixed percentage of median earnings within five years. The Low Pay Commission, which currently advises the government on the minimum wage rate, would be given a broader remit to investigate and address low pay.

Buckle said that with millions of people earning just above the minimum still living in poverty, “we need a broader and more ambitious strategy to tackle low pay and move to a more high skill, high wage economy”.

The report points to figures showing that one in five workers — or 5.2 million people — earn less than the living wage. Poor enforcement also means that an estimated quarter of a million people are paid below the minimum wage.

Neither Buckle nor Miliband have indicated a specific percentage figure for the minimum wage target.

In a report for the Resolution Foundation think tank in March, Professor Sir George Bain, the first chair of the Low Pay Commission, recommended that 60% of median earnings would be a reasonable “lodestar” for the government to follow in setting the rate.

www.yourbritain.org.uk/uploads/editor/files/Alan_Buckle_review_FINAL_16May2014.pdf

http://press.labour.org.uk/post/86155311399/only-labour-will-tackle-the-scandal-of-low-pay

www.resolutionfoundation.org/publications/more-minimum-review-minimum-wage-final-report/