New report makes the case for a £15/hour minimum wage by 2024 to compensate employees for a “lost decade” of wages
14 million people would see an increase in pay under proposals to increase the minimum wage to £15/hour, according to new research by James Meadway and Howard Reed for the Progressive Economy Forum (PEF).
‘The Case for a £15/hour Minimum Wage’ finds that this increase would correct for low-paid employees’ losses over the last ten years, and work to restructure the labour market away from low paid and insecure work in order to protect living standards from inflation amidst the cost-of-living crisis.
As well as protecting working people by ensuring wages rise above inflation, PEF’s modelling shows that a £15/hour minimum wage by 2024 would be:
Redistributive
- The poorest 70% of households would see a 6.9% increase in their forecast incomes.
- A strong “Levelling Up” measure, with 33% of employees in London benefitting, compared to (for example) 51% of employees in the North of England.
Affordable
- A £15 hour minimum wage would compensate workers for a ‘lost decade’ of zero wage growth since the financial crisis, returning the workers’ share of national income back to the levels of the early 2000s.
- This policy would raise a further £32.7bn in taxation from income and National Insurance Contributions.
- It would save the government £4.2bn on income-contingent benefits payments.
- The overall result is a £25.1bn improvement in the public finances, after taking off the increase in the public sector pay bill that arises from the change.
The report authors propose phasing in the move over the next two years to 2024 in order to give more time for businesses to adjust, and suggest using the additional income from taxation to compensate smaller businesses for their increased costs.
Read the full report HERE.
Endorsements for PEF’s research:
Zarah Sultana MP, said:
“Energy bills are soaring, food prices are rocketing, but wages are standing still. The national minimum wage simply isn’t enough and more and more people are facing poverty pay.
“This ground-breaking research shows that a significant rise in the minimum wage – rising to £15 an hour by 2024 – would give a real pay rise to nearly 14 million people, lifting families up and down Britain out of poverty.
“The Tories like to talk about ‘levelling-up’, but a £15 an hour national minimum wage by 2024 would actually do it.”
Clive Lewis MP said:
“Until the political will exists for reform of the UK’s economically damaging anti-trade union legislation, a new and enhanced minimum wage floor is urgently needed. Whilst the moral case for a £15 an hour living wage should not be in question, the economic one, for many, has been. And yet the evidence presented in this report for both, is now overwhelming.”
Nadia Whittome MP said:
“After years of stagnant wages and now rapidly rising prices, a £15 an hour minimum wage has the potential to lift millions out of poverty. This research shows that it’s exactly the kind of bold policy intervention the government should be considering to help tackle the cost of living crisis.”
