Yes, a whole 25 pence more will be received by the lowest paid workers. That’s a whole £1.25 more earned in the space of a five-hour working day — Dolce & Gabbana here I come!
Taken from ‘By what are wages determined?’, in Wage Labour and Capital by Karl Marx:
This minimum wage, like the determination of the price of commodities in general by cost of production, does not hold good for the single individual, but only for the race. Individual workers, indeed, millions of workers, do not receive enough to be able to exist and to propagate themselves; but the wages of the whole working class adjust themselves, within the limits of their fluctuations, to this minimum.
At a time when the world has never seen so much inequality, almost 270,000 of the UK’s lowest paid workers are set to benefit from an annual pay rise of £450 (based on a 35-hour week), with the increase of 25p an hour making the new £6.95 National Minimum Wage the highest rate ever in real terms. It is the largest increase since 2008, outstripping average wage growth and inflation and surpassing the previous pre-recession peak. Around 210,000 workers aged under-21 and apprentices will also see an increase to their earnings. The rise in the National Minimum Wage follows the introduction of the £7.20 National Living Wage (enacted back in April 2016) for those aged 25 and over, giving around 1.3 million workers a pay rise.
Is this fantastic news for all workers, or a soft attempt at an olive branch from a Conservative government that has hammered the poor since 2010 and continues to do so on all fronts?
The new rates have been recommended by the independent Low Pay Commission after careful consideration of evidence from both workers and employers. On this, Business Secretary Greg Clark said that: ‘Government promised to create an economy that works for all and today’s increase means our lowest paid workers will benefit from their largest pay rise since the recession’. Adding that this ‘will make a real difference to hard-working people up and down the country and means for the vast majority of workers, the National Minimum Wage is at its highest level in real terms’. Meanwhile at last week’s Labour Conference in Liverpool, Shadow Chancellor John McDonnell outlined a vision to up the minimum wage to £10 an hour, a policy the Green Party have also stood by for a while.
The Government has increased HMRC’s enforcement budget this year by £7 million (from £13m to £20m), improving its ability to crack down on employers who fail to pay staff properly. Everyone entitled to the national minimum or living wage has to receive it, and employers who fail to pay will be punished, as well as being publically named and shamed.
Employment rates are at a record high of 74.5 per cent while unemployment is at its lowest level in over 10 years at 4.9 per cent. This of course includes an increasing number of zero-hours contracts which aren’t ideal for the thousands of single mothers that are employed on them. In the 1800s, Karl Marx wrote of minimum wages that: ‘The worker perishes if capital does not keep him busy. Capital perishes if it does not exploit labour-power, which, in order to exploit, it must buy’, and this still rings true today. In a corporation, one which employs people (more often than not, young people, women or immigrants) on zero-hours contracts for minimum wage, workers get sent home early or can easily lose out on shifts for reasons of trying to keep costs down.
What is crucial about this is that poorer members of society have a higher propensity to spend meaning that, unlike with the wealthy, this money will be put straight back into the economy. A pay rise is always a promising step, but is it worth getting overjoyed about? The working class remain the working class, in essence this is like a lord handing his subjects a few extra crumbs. Twenty-five pence extra an hour does not give workers any more ownership. It only makes workers less likely to unite and demand real change. Revolution happens when expectations are raised and then circumstances rapidly deteriorate. If we are receiving minimum effort from corporations with regard to payment of workers, why is the workforce expected to put in any more than minimum effort with their labour? The answer is of course because a worker can be sacked and replaced. We need a progressive minimum wage with big companies being tackled first, followed by subsidies to small business in order to help them pay their workers fairly.
In a fantastic episode of The Trews, Russell Brand rightly points out how ‘Capitalism is doing alright for the people at the top’. When poor people want more money, they are slammed for being greedy. Rich people want more money and they are called ambitious. How often do we hear wealthy people in society say things like ‘What’s wrong with being ambitious?’ or ‘What’s wrong if I want to provide for my family?’ This is an attitude that should not be monopolised by the rich, the poor have the same needs, and desire to provide too.
The narrative propagated by media corporations about ‘scroungers’ and ‘radicals’ who are in working poverty, choosing between heating and eating, needs to stop. An article from the Daily Telegraph (written in 2015) is entitled ‘How generous is the British minimum wage compared with the rest of the world?’ The real questions are: Can a minimum wage ever be generous? How about a maximum wage?
Summary of changes that will be enacted as of October 1, 2016:
¥ The rate for 21- to 24-year-olds will increase by 25p to £6.95 per hour
¥ The rate for 18- to 20-year-olds will increase by 25p to £5.55 per hour
¥ The rate for 16- to 17-year-olds will increase by 13p to £4 per hour
¥ The apprentice rate will increase by 10p to £3.40 per hour
Workers are reminded to check that their pay slips are updated to reflect the new rates.