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Cameron considers minimum wage freeze Tuesday, 21st February 2012
The government is considering calls to freeze the national minimum wage in a bid to encourage more employers to hire staff.
This is the strongest indication yet that the coalition is prepared to block an increase to wages of the lowest paid workers in the United Kingdom.
The Low Pay Commission, the body which recommends minimum wage rates to ministers, sent its report to Downing Street and the Department for Business, Innovation and Skills (BIS) last week.
Minimum wage rates currently stand at £6.08 per hour for adults, £4.98 for those aged 18-20 and £3.68 for workers aged 16-17.
In its evidence, the BIS warned that minimum wage increases made employers reluctant to hire.
“With the global economic recession, the UK experienced the deepest decline in output of the post-war period,” the BIS report said.
“The decline was arrested during the middle of 2009, but the recovery has been choppy and relatively subdued. The effects of the economic downturn are still being felt in the UK labour market in the recovery.”
It said that the commission should “consider concentrating their attention on the effect of a rise in the adult National Minimum Wage on employment”.
“There are also extra reasons to be cautious and moderate in recommending NMW (National Minimum Wage) rates for young people,” BIS said.
“Evidence suggests that labour market outcomes of younger workers are more at risk from the uprating of the NMW.”
This news comes as no surprise to those outraged by the Government’s work experience scheme after Tesco was found to be advertising for permanent workers in exchange for Government expenses and Jobseeker’s Allowance.
A Tesco supermarket in central London was forced to close on Saturday after it was invaded by members of the Right to Work campaign.
Employment minister Chris Grayling defended the scheme, branding critics “job snobs” and adding: “I praise Tesco for offering unpaid work experience, short-term, to young people because it helps them,” he said at the weekend, adding that the scheme worked “enormously well”, and insisted it was entirely voluntary.
“They don't have to do the work experience placements, but something like half of them are coming off benefits as a result of those placements. Surely that's really good news.”
Sam James, chairman of the Right to Work campaign said: “Based on the Government's own figures, these schemes have already provided more than £67.5 million in free labour to businesses that make billions in profit.
“Why is the Government subsidising Tesco with our money when it could be investing to create the millions of jobs needed to end the unemployment crisis?
“It is Tesco's responsibility to pay properly for its staff - not the Government's. They should pull out of the scheme like Sainsbury's and others.”
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