Call for reform of the minimum wage

The man who implemented the national minimum wage in the UK has warned that it is no longer strong enough to tackle the country’s low pay problems.

Professor Sir George Bain, the founding chair of the Low Pay Commission which recommends the rate of the minimum wage, is heading up a review of the policy’s future at independent think tank the Resolution Foundation. Professor Bain argues that the minimum wage has been a clear success in the first 15 years of its life but that the policy now needs strengthening to keep it effective and relevant for the next 15 years.

While the minimum wage has been highly successful at lifting most people out of extreme low pay, it has not had the upward ‘ripple effect’ that many expected. As a result, many workers earn just above the minimum wage but still too little to get by. In some sectors, the minimum wage has become the going rate.

“The minimum wage has been a clear success but the world has changed in the fifteen years since it was introduced. We now know the policy has not caused unemployment, and there is broad political support. But with more than one in five workers in Britain suffering from low pay, it’s time to talk about how we strengthen the minimum wage for the years ahead,” said Professor Bain.

“Reform of the minimum wage will be hard to get right—it would be easy to damage a policy that works well. But our discussions suggest there are ways to take a more assertive and ambitious approach while still keeping the flexibility of the current system,” he explained.

The Resolution Foundation has now published an interim report from the review, setting out a range of options for reform.

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