Link to this page: https://www.socialistparty.org.uk/issue/260/24666
Who Can Live On Poverty Pay?
ADAIR TURNER, the new chair of the Low Pay Commission, the body which decides how low to set the national minimum wage, has admitted that he "couldn't possibly envisage" surviving on the national minimum wage level of £4.10 an hour - £164 a week.
We bet he couldn't! Turner's a rich man. He is also chairman of Merrill Lynch Europe, the London-based wing of the Wall Street investment bank. He earns around £250,000 a year plus a nice bonus from that.
He also moonlights on lucrative non-executive directorships such as one at Labour millionaire Lord Hollick's United News and Media. He used to be director-general of the bosses' Confederation of British Industry, where he pontificated at length on the horrors of a minimum wage before it came in three years ago.
He defended the low level as setting the "key balance" between too low pay and "too high" where profits suffer and jobs are lost. But, Mr Turner, the minimum wage rate has been set so low, it has little impact either on the working poor's living standards or on big business profits.
That's even more the case with young people, where the minimum rate for 18- to 21-year-olds is a pathetic £3.60 an hour. Under-18s are barred from the minimum wage totally.
The minimum wage doesn't even lift low-paid workers out of the poverty trap. If the rate rises, many working families find most of the increase is taken away by reductions in benefit.
The European Union has a decency threshold, the minimum level needed to live decently. That's £7.50 an hour. It's not until you earn over this threshold that low-paid working families keep most of any wage rise.
Even a fat-cat boss like Turner can see that the low level of the national minimum wage is making low-paid workers very angry.
- The trade unions should campaign for a minimum wage of at least £5 an hour as a step towards the European decency threshold of £7.50 an hour. For a minimum income of £300 a week.
- No exemptions. For an annual rise in the minimum wage rate, linked to average earnings.
In The Socialist 28 June 2002: