George Osborne wants to see the Low Pay Commission raise the minimum wage to £7.00 an hour.
Mr Osborne has stated he would like the independent Low Pay Commission to increase the minimum wage to above inflation increases. Currently it is £6.31 per hour and an increase to £7.000 an hour is likely to be actioned over the next two years.
Why the change? Well the treasury have looked into the effect of this on the economy and can’t see it having any real negative impact on employment and the labour market as a whole. They also believe that wages will start to increase during 2014 and increasing the minimum wage will keep in line with private sector salary increases.
However the CBI has not been impressed with the announcement’s, they have stated it would be “unaffordable” if it is not in line with increased business productivity. The CBI has also been scare mongering stating it will actually lead to job losses.
The minimum wage increase announcement is deemed by others as just a point winning exercise ahead of the general election next year. However you may look at this, a minimum wage increase surely must be a good thing as a whole. A small increase can really help those at the bottom of the ladder.