Minimum wage rise announced

Trade and Industry Secretary Patricia Hewitt has revealed that the UK's minimum wage will rise to over £5 an hour later this year.

Starting in October, the minimum hourly rate for those 21 years of age or older will rise 4% to £5.05 – a move anticipated to benefit some 1.4 million UK workers. A further 6% rise to £5.35 an hour will then follow in October 2006. Those between the ages of 18 and 21 will be entitled to earn at least £4.25 an hour from this autumn, increasing to £4.45 a year later.

Announcing the changes, Hewitt commented that “the great news is that well over a million workers will receive a guaranteed pay rise by October.”

“Despite predictions to the contrary,” Hewitt went on to add, “the national minimum wage has not affected the job prospects of low-paid workers in the UK [with] unemployment at a record low.”

While the news could please workers in election year, small business owners may be less impressed. Alan Tyrell, employment chairman of the Federation of Small Business argued that “the national minimum wage has already risen by 34.7 per cent in a five-year period when private sector wage increases have remained stable.

“The minimum wage should be adjusted as a direct response to economic conditions – and not as a concession to trade unions or in a bid to win votes,” he expounded.

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