From Monday 1 October the national minimum wage (NMW) rises by 11 pence for most everyone over 21 years of age who is covered by its provisions. On Camden Council contracts this incredibly modest hike to £6.19 an hour is mainly relevant to cleaners now working for the multinational ISS along with some staff in school kitchens.
In reality, though, the increase in NMW is a cut since 11 pence amounts to 1.8% of the previous £6.08 an hour rate and so lags behind both the main measures of inflation including the Retail Price Index, which takes account of housing costs and is currently running at 2.9%. Worse still the lower NMW rate for most young workers under 21 remains absolutely frozen, effectively reinforcing the claim that increasing wages for low-paid workers reduces employment prospects.
Meanwhile, the tiny rise in the ‘adult’ rate of NMW does next to nothing to bridge the gap between it and the London Living Wage, which unlike NMW has no basis in law and which has actually remained at £8.30 since spring 2011, so taking no account of rising living costs in the capital over the past 18 months. Elsewhere in the country the difference between the NMW and the estimated level for a living wage still exceeds £1 an hour.
From the perspective of council workers outside London the gap between the NMW and the lowest rate on the local government pay scale has narrowed to just 10 pence an hour, reflecting the impact of a pay freeze now in its third year for the vast majority of local government workers, who have seen their real pay eroded by 13% since 2009. Unfortunately, Labour’s Shadow Chancellor is offering no comfort to the low-paid as he and party leader Ed Miliband have maintained their refusal to oppose the continuing pay freeze as the party’s conference gets underway in Manchester.
In short, union organisation and action will clearly be required if there is to be any serious prospect of reversing the dramatic erosion of living standards for council and other public sector workers any time soon.