Britain's Conservative government raised the minimum wage by 7.5 percent on Friday in a move denounced by critics as largely symbolic in an era of state austerity. Around 1.8 million employees will benefit from the National Living Wage (NLW). Workers aged 25 and over will now earn a minimum hourly gross wage of £7.20 ($10.36, 9.10 euros) compared with £6.70 previously.
"The National Living Wage will play a central role in moving Britain to a higher wage, lower tax, lower welfare economy," said British finance minister George Osborne. "It will also mark the end of the gender pay gap for some of our lowest paid and hardest working people."
The new increased amount compares with an 8.50 euro minimum wage rate in Germany and almost 9.70 euros in France. In Britain, where unemployment is relatively low at around 5.0 percent, large wage inequalities persist and London School of Economics professor Alan Manning described the NLW as "more symbolic" than anything else. "It's significant but I don't think one should exaggerate its significance," he told AFP.
The rise in the NLW represents just 0.1 percent of the country's wage bill, while workers under the age of 18 will still earn below £4.00 an hour as a minimum wage. The hourly rate of £7.20 is below the amount recommended by the lobby group Living Wage Foundation, which claims that workers aged 18 and over should earn at least £8.25 a hour, rising to £9.40 in London where housing rents tend to be far higher compared with the rest of the country.
"Today's new legal minimum is an important step forward in tackling low pay in the UK," said Katherine Chapman, director of the Living Wage Foundation. "We welcome the news that millions of workers will get a pay rise. However, the job is not done when it comes to tackling low pay," she said. "Around six million people earn below the voluntary Living Wage in the UK, with women, young people and part-time workers most affected by low pay." Workers' representatives meanwhile stress that the introduction of the NLW should be seen alongside cuts to welfare payments.
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