Workers 'driven into poverty'

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Labour Editor

Abolition of wages councils has driven more than 1 million workers into poverty, most of them women, according to a report by the Low Pay Network.

On the anniversary of the decision to remove statutory minimum pay rates in service industries and clothing manufacture, half of all job vacancies paid less than the council rates if updated to present circumstances, the report found.

In November 1993, four months after abolition, 22.3 per cent of employers were paying below an updated wages council rate. In April last year the proportion stood at 36.5 per cent, the researchers found. The worst "underpayment" was in the retail sector, where 59.5 per cent of vacancies paid less than the relevant rate, followed by hairdressing at 49.3 per cent, hotel and catering (45.8) and clothing manufacture (28).

Nearly eight out of ten job offers in hotels, catering, hairdressing, shops and clothing companies involved wage rates below the amount a family with two children would get on Income Support, according to Priced into Poverty, an analysis by the Low Pay Network.

Nearly half of the full-time jobs fell into this category and virtually all of the part-time jobs.

In a survey involving 40 Jobcentres acrossBritain, the network found that nearly four out of ten jobs paid less than the National Insurance threshold of pounds 58 a week. The network argues that this is increasingly used as a deliberate mechanism by employers to avoid National Insurance contributions. This means that many workers, particularly women, are unable to claim contributory benefits such as unemployment, maternity and sick pay, as a well as a state pension. About 80 per cent of the 2.5m workers covered by the wages councils were women.