Latest news with #minimum wage
Yahoo
4 days ago
- Business
- Yahoo
National living wage to increase in 2026 - here's why some think it should be even higher
The government has been told to increase the national living wage next year - but many campaigners think it should be a lot higher. The national living wage should increase by as much as 65p next year to help people with the rising cost of living, a government body has recommended. The Low Pay Commission said the amount - an obligatory minimum wage payable to workers aged 21 and over - should be bumped to an average of £12.71 per hour, rising from the £12.21 per hour set in April. Depending on economic condition, it could reach as high as £12.86. As the body works to recommend a wage that keeps up with the ever-increasing cost of living, some organisations want to see the hourly wage increase higher to make sure it isn't outstripped by skyrocketing prices and rising rents. Here's what's going on with the rates at the moment, and what that means for you. What is the national living wage set at currently? As the table below shows, the national living wage is set at different rates according to a person's age and employment status. Apprentices under the age of 18 are paid just £7.55 while they are in training, according to this year's rate. The national minimum wage (for 18-20-year-olds) is set at £10, rising to £12.21 for those aged 21 and over. With this in mind, the Low Pay Commission also consults employers, trade unions and workers on narrowing the gap between the national living wage and the minimum wage rate for 18 to 20-year-olds. Usdaw, a union representing retail and distribution workers, said it "welcomes the Government's commitment to removing discriminatory age bands." "This is an issue Usdaw has campaigned on for a number of years and the updated remit will help to put an end to rip-off youth rates to deliver a single national minimum wage for all adults," the union's general secretary Joanne Thomas told Yahoo News. Should the national living wage be higher? One of the jobs of the Low Pay Commission is to suggest a wage that factors in economic and political factors - and not just the cost of living. While the Labour government has said boosting wages is a priority, Keir Starmer and the cabinet have reiterated their modest spending proposals while they fight a growing deficit and improve the UK's economic outlook. Introducing a minimum wage protects vulnerable workers from being exploited, but economists generally caution against setting a minimum wage too high because economic models predict that doing so could lead to higher unemployment. If a firm does not believe paying someone a certain wage is proportionate to the role, they may not make any additional recruits, or make redundancies. Nonetheless, some organisations think that - all things considered - the national living wage should be set a lot higher. Usdaw, which represents hundreds of thousands of workers who are paid an hourly rate, thinks a £15 per hour minimum is representative, no matter what age the worker is. This is because many low-paid workers among Usdaw's membership currently earn wages that do not reflect their contribution or provide a decent standard of living. The union's general secretary told Yahoo News: "We continue to engage with the Low Pay Commission to recommend as high an increase as possible with a goal of moving towards a rate of £15 for all workers. 'We very much welcome the steps being taken so far by government to tackle low pay and deliver a genuine living wage for working people. "Usdaw has consistently campaigned for significant increases in the national minimum wage, and it is great to see the progress already made on this issue under a Labour government." What is the real living wage? The Low Pay Commission's recommendation of a national living wage of £12.71 per hour next year would outpace the current "real" living wage" outside of London. But how does the real living wage differ from the one set by the government? While the national living wage and the national minimum wage are legally binding, the real living wage is a voluntary pay rate set by the Living Wage Foundation, independently calculated based on what it says is the actual cost of living. Whereas the Low Pay Commission weighs up the cost of living alongside political and economic interests, the real living wage takes into account factors like universal uptake, the average cost of a food shop, council tax, housing costs and childcare costs. It is currently set at £12.60 outside of London, and £13.85 in London. A total of 16,000 employers paying the real living wage are currently accredited by the Living Wage Foundation, like Sunderland City Council and the National Theatre. In an area where child poverty is significantly higher than the national average — standing at 39.1% — the Leader of Sunderland City Council, Councillor Michael Mordey, said "becoming an accredited real Living Wage employer is simply the right thing to do". The council, which has paid the wage for the last 11 years to its staff, also encourages contractors to pay the real living wage to its hires. Others like sports and leisure business Levy UK cited the moral and economic case for introducing the wage to help employees during inflation and cost-of-living pressures. They also mentioned the cash boost improving staff morale, motivation, and retention. However, not every sign-up has been a roaring success. While several employers introduced the higher wage in response to the cost-of-living crisis, a number of employers have also cited it as a reason to end it. Outsourcing company Capita announced in 2024 it would no longer be paying the wage "following its second significant annual increase" of 10%, which raised the recommended rate outside of London from £10.90 to £12 per hour. The move sparked protests at the company's Lancashire office, with CWU regional secretary Carl Webb calling the decision "an absolute disgrace". Beer giants BrewDog also sparked backlash when it withdrew from the scheme in the same year, with the company justifying it as a necessary step to return to profitability following a £24 million operating loss in 2023, despite a revenue increase to £321 million. The company has been dealing with some financial setbacks, shutting ten sites including in Leeds, Oxford, Sheffield and York in July, citing "rising costs, increased regulation, and economic pressures".
The Independent
6 days ago
- Business
- The Independent
National living wage likely to rise to £12.71 next year, advisory body estimates
The national living wage could rise by as much as 65p an hour next year, an advisory body has estimated, as the terms of its annual review of wage rates were published. Ministers are determined to deliver 'a genuine living wage', according to the Low Pay Commission's (LPC) latest remit for increasing the so-called national living wage – the UK minimum wage for workers aged 21 and older. At the moment, the national living wage is £12.21 an hour. The LPC estimates that this will need to increase to £12.71 in 2026 to not fall below two-thirds of median earnings: the threshold which the Government expects it to stay above. But the LPC acknowledged the national living wage could rise to as much as £12.86 an hour, or as little as £12.55 an hour, depending on changing economic conditions. Founded in 1997, the advisory body provides recommendations to ministers each autumn regarding how it believes the minimum wage should be changed. The Government ultimately sets minimum wage rates for the following April after this advice. A letter from Deputy Prime Minister Angela Rayner and Business Secretary Jonathan Reynolds said the committee must take into account the cost of living as it reviews the national living wage. The two senior ministers insisted the Government was 'committed to ensuring that the minimum wage is a genuine living wage'. They added: 'We continue to recognise that our ambition should be backed by evidence, and that the minimum wage rate should be consistent with delivering inclusive growth for working people and businesses alike. 'We are therefore asking the LPC to recommend a national living wage rate that is at least two-thirds of UK median earnings for workers aged 21 and over, to apply from next April, which takes into account the cost of living, effects on employment and developments in the wider economy.' Elsewhere, the Government is pushing forward with plans to end 'discriminatory' age banding for the minimum wage, and has extended the LPC's remit to examine this. It said the LPC will consult with employers, trade unions and workers on narrowing the gap between the national living wage and the minimum wage rate for 18 to 20-year-olds, which is currently £10. There is also a minimum wage for those aged under 18, and apprentices, of £7.55. The LPC will report back in October with advice to the Government on how much the minimum wage should rise by in 2026. The Resolution Foundation, a think tank which works to improve living standards, suggested the Government was using 'ambitious language' on increasing the minimum wage, but in reality was adopting a cautious approach. Nye Cominetti, principal economist at the think tank, said: 'Despite the Government's ambitious language around 'delivering a genuine living wage', the new remit for the Low Pay Commission represents a steady-as-she-goes approach to the adult rate, after faster increases in the years preceding 2024. 'This caution is warranted given worrying labour market data, which is thanks in part to the Government's increase in employer national insurance contributions in April.'
Telegraph
7 days ago
- Business
- Telegraph
Rayner pushes higher wages for 18-year-olds as Labour woos young
It comes as Labour tries to woo younger voters in an attempt to see off the growing threat from Nigel Farage's Reform UK Party, which is currently leading the polls. Ms Rayner set out plans last month to lower the voting age across Britain to 16 by the next general election – in a move she claimed will strengthen democracy. The Low Pay Commission will be tasked with setting out a path to lift the minimum wage for young workers to the full adult rate. Ms Rayner said the policy showed Labour was delivering on its promise to 'make low pay a thing of the past'. However, bosses warned that Labour was already taxing jobs for young people 'out of existence', with businesses already reeling from a £25bn National Insurance raid last autumn. Kate Nicholls, the chairman of UKHospitality, said another jump in the minimum wage for young adults would risk destroying even more of their jobs instead of helping workers. 'We understand the Government's objective of fair pay, but you can only have fair pay if you have got a job that actually pays,' she said. 'At the moment, those jobs are being taxed out of existence due to changes in the NIC [National Insurance contributions] rate.'
Reuters
04-08-2025
- Business
- Reuters
Japan panel proposes 6% minimum wage hike to counter inflation woes
TOKYO, Aug 4 (Reuters) - A Japanese Labour Ministry panel on Monday proposed a 6% increase in the national average minimum wage for this fiscal year, the biggest such jump since at least 2002, as the government scrambles to sustain wage-driven economic growth. Achieving real wage growth has become a top policy priority for Japan, as persistent inflation continues to squeeze households. Prime Minister Shigeru Ishiba's ruling coalition has lost its majority in both houses of parliament in recent elections, highlighting growing frustration with the government's response. The proposed hike would raise the average minimum wage to 1,118 yen ($7.57) per hour, a labour ministry official said, surpassing last year's 5% increase and marking the largest rise since the current system was introduced 23 years ago. Ishiba pledged last year to make "untiring efforts" to raise the average minimum wage by 42% to 1,500 yen per hour by the end of the decade, bringing forward the target from the original mid-2030s goal set by the previous administration. Higher minimum wages carry significant implications for Japan's wage trajectory, especially given that the proportion of workers affected by minimum wage revisions is relatively high compared to other developed economies. However, steep wage hikes pose risks for small businesses, which employ about 70% of Japan's workforce, as these firms already allocate a larger share of profits to wages than their larger counterparts and may struggle to absorb further increases. Japanese companies agreed to raise wages by an average 5.25% this year, their biggest pay hike in 34 years and the third straight year of robust growth as they grapple with severe labour shortages and seek to shield workers from inflation. The wage outlook is among key factors the Bank of Japan will scrutinise in deciding whether to raise the interest rate again. Unlike other major economies, Japan's inflation-adjusted real interest rates remain deeply negative due to the slow pace at which the BOJ rolled back a decade-long, massive stimulus. ($1 = 147.7600 yen)
Telegraph
24-07-2025
- Politics
- Telegraph
Minnesota's Mamdani: Socialist wants to replace police with ‘peace officers'
Mr Plechash was baffled at Mr Fateh's anti-police stance in a city that only a few years ago saw businesses torched and cars set alight as violent mobs rampaged through the city, protesting Floyd's killing by officer Derek Chauvin. 'If you do that, safety goes out the window, and the very people that are screaming are the ones who get hurt. So it doesn't make any sense to me.' Mr Fateh has criticised Mr Frey, who has served as mayor of Minneapolis since 2018, for failing to 'fight' President Donald Trump on immigrant rights and has previously introduced legislation to make Minnesota a 'sanctuary' state. Like Mr Mamdani, he has pledged to raise the minimum wage – though to $20 an hour compared to $30 in New York – establish rent controls, and 'protect our city from a hostile White House'. Accusing the mayor of criminalising homelessness in Minneapolis, Mr Fateh said he would increase funding for shelters and take a 'compassionate approach' to encampments. With homeless encampments leaping up across many Democrat-run cities, notably San Francisco and San Diego in California, the issue is a politically-charged one and prompted many liberal bastions to swing right in recent elections. To pay for his campaign promises, Mr Fateh has said he wants to institute an income tax to 'ensure the wealthy pay their fair share', while floating a flurry of other levies including a commercial vacancy tax and a land value tax. 'He's coming in with a socialist agenda' Mr Peppin said he expected Minneapolis' business community to be in a 'near panic' about the prospect of Mr Fateh becoming mayor. 'The downtown business community – I wouldn't necessarily say they had an ally in Jacob Frey… but they had somebody who would listen,' he said. 'I question whether Omar Fateh is going to be somebody who will even listen to the business community. I think he's coming in with a socialist agenda, and he will do nothing but give lip service to any of them.' Mr Frey is challenging the DFL's endorsement of his rival, citing 'flawed and irregular conduct' at the convention. It is far from the first such controversy Mr Fateh has been involved in. In 2022, the candidate's brother-in-law, Muse Mohamud Mohamed, was convicted of perjury and sentenced to house arrest about his handling of mail-in ballots during his 2020 primary campaign. Three voters testified they did not know him and had not asked him to pick up their ballots. Mr Fateh, who ended up winning the election to state senate by around 2,000 votes, disclaimed any knowledge of Mr Mohamed's actions. Ethics investigation He was also investigated by a state senate ethics committee for allegedly receiving free advertising from Somali TV of Minnesota, a YouTube channel. Mr Fateh said he had failed to include paying $1,000 for the adverts in his campaign reports. He was ordered to take part in campaign finance training but the committee did not find any evidence of a 'quid pro quo'. Controversially, in 2023 he faced another ethics probe over allegedly suggesting Republican senators resembled violent terrorists who 'advocate for the superiority of the white race'. While many commentators and state media have drawn the comparison to Mr Mamdani, Mr Fateh is still yet to attract the following commanded by the New York mayoral candidate, who swept to victory last month over the former state governor Andrew Cuomo. Some suggest Mr Fateh, though in his mid-30s, does not have the social media savvy or charisma of his New York counterpart, and so far he has not been endorsed by leading Left-wing figures like Bernie Sanders or Alexandria Ocasio-Cortez. Still, the ascent of the 'Minnesota Mamdani' comes just weeks after the New Yorker's win. There may be more Mamdanis to come.
