£6.08 will be the new rate for the 18 plus worker, while 18 to 20 year-olds will get £4.98. Apprentices will receive £2.60 an hour while 16 to 17 year-olds will get £3.68. The LPC was unanimous in its recommendations “despite all the economic uncertainties”, according to its Chairman, David Norgrove.
The rise in the rate has been welcomed in some quarters. Neil Bentley, deputy Director-General of the CBI said: “This moderate increase strikes the right balance during a period of economic uncertainty. It means workers on the minimum wage will not fall behind the rest of the workforce in terms of pay rises.”
Business Secretary, Vince Cable said that the rises would benefit 890,000 people and claimed that they “reflected the current economic uncertainty while at the same time protecting the UK's lowest-paid workers".
However, some unions and business groups are not happy at the rises, for different reasons. According to Len McCluskey, General Secretary of Unite, "This small increase in the minimum wage is completely outstripped by the current rate of inflation”. Whereas his counterpart at the TUC, Brendan Barber said that the "modest" rise should stimulate local economies where workers spend their wages.
According to the British Chambers of Commerce (BCC), the rises could price young people out of work at a time when youth unemployment is at a record high. David Frost, Director General of the BCC said that the rises were “the wrong increase at the wrong time” and that it was “clear from speaking to businesses that a significant number are having to freeze wages in 2011. These changes will be a barrier to job creation, and ultimately economic recovery."
Only time will tell who is right.
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