The number of people on minimum wage has doubled since 1999

A record 1.2 million people are on the National Minimum Wage, which rises today – twice as many as were on the lowest legal pay rate in 1999, when National Minimum Wage was introduced.

The rate rises from £6.31 to £6.50 for adults today.

National Minimum Wage rates from today:

  • £6.50 for adults over the age of 21
  • £5.13 for 18-20 year-olds
  • £3.79 for 16-17 year-olds
  • £2.73 for apprentices

The Resolution Foundation carried out a study which found an increasing number of people are “stuck” on the minimum wage with little or no job progression.

Others agreed adding there should be further increases in the minimum wage as it had not kept up with inflation.

TUC general secretary Frances O’Grady said: “It is good news to see the worst paid adult workers receiving a pay release above inflation for the first time for six years. But it’s a muted celebration because the minimum wage would be worth at least £7 today had it kept up with rising prices.”

“Stickiness”

The Resolution Foundation said it used to rise faster than inflation but had been “blown way off course”.

Matthew Whittaker, chief economist at the Resolution Foundation, said: “Years of big increases in the minimum wage before the recession pulled the rate closer to median earnings and brought millions more workers within close proximity of the rate. The recent collapse in earnings looks to have accelerated this trend.

“The increased ‘stickiness’ of jobs on the minimum wage is a cause for concern, not least for those unable to escape very low pay. Tackling the growth and persistence of low pay is a key test of whether this will be a shared recovery.”

Fall in living standards

This comes as Office for National Statistics figures suggested living standards have fallen much further than first thought.

The ONS revised estimates it had made about the economy during the recession. It found Britain recovered three-quarters sooner than we initially thought going by the ONS’s new measure, however it also revealed the fall in real wages has taken a much bigger toll than previously estimated.

Real household disposable income per capita in 2013 was still 2.6% less than in 2007, before the start of the recession.

In previous estimates, the figure for 2013 had been 1.8% below that for 2007.

This indicates families have less spare cash than before the recession.

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