UK – A High Wage Economy? Don’t Be Fooled

Britain's high wage economy - don't be fooled

There’s recently been a lot of talk about the UK’s supposedly ‘high-wage economy’. But is this based on fact? Here are four reasons to be doubtful.

UK companies still don’t pay the legal minimum wage

Today, the Department for Business, Innovation and Skills has ‘named and shamed’ another 92 companies that have failed to pay their staff the National Minimum Wage.

Of the £1.9 million total underpayment, the worst offender was London’s TSS (Total Security Services) Limited, which failed to pay more than £1.7 million to 2,519 employees – an average underpayment of £691 for each of the 2,519 employees affected.

The BIS press release says that “Since the scheme was introduced in October 2013, 490 employers have been named and shamed, with total arrears of over £3,000,000 and total penalties of over £1,100,000”. It’s great to see the government naming and shaming those organisations that are failing to pay the National Living Wage, but there’s a much bigger scandal that remains unaddressed.

And the minimum wage falls way below what people need to live off anyway

Recently, there’s been a worrying fall in the proportion of jobs available that are secure and pay the Living Wage – despite growing employment overall. So when we hear good news stories in terms of job creation – we need to be questioning the quality of the jobs being created.

There is a huge disparity between the government’s National Minimum Wage and the hourly rate calculated by the independent Living Wage Foundation as the minimum hourly pay that is needed to allow a full-time worker to cover the basic costs of living in the UK.

An apprentice working 35 hours per week in the UK and paid the National Minimum Wage will earn just £6,006 per year.

Read More