By Richard Johnstone | 14 October 2013
Increasing the National Minimum Wage to the level of the Living Wage has the potential to save government billions of pounds, Unison has said today.
The trade union has made a submission to the Low Pay Commission calling for the NMW, currently £6.31 an hour, to be increased towards the Living Wage rate of £7.45, or £8.55 in London.
Unison’s submission comes after Business Secretary Vince Cable called on the commission to examine how the NMW might be increased without hitting jobs.
The union highlighted figures from the Institute for Public Policy Research and the Resolution Foundation, which found the Treasury would benefit to the tune of £3.6bn if the Living Wage were introduced. The gain would be derived from higher tax revenue and a £1.1bn saving on means-tested benefits.
A higher NMW would also stimulate the economy by boosting consumer confidence and spending, the submission stated. Every £1 an hour extra earned by low paid workers leads to an extra 63p of income for the local economy.
Unison general secretary Dave Prentis said around 1 million workers in the UK are paid exactly the minimum wage, while a fifth of the workforce earn less than the Living Wage
‘There is a real groundswell of support across the political divide and amongst the public in favour of the Living Wage,’ he added.
‘We know that ending poverty pay is just what the country needs to get it moving. It is a win-win scenario that would boost consumer spending helping struggling businesses and local high streets to survive.
‘It would stop Scrooge employers using taxpayers’ money to top up poverty wages and would act as a catalyst for closing the gender pay gap.’
