The Minimum wage at 20: Too many employers are still trying to get around it

The way it has risen is welcome, but it's also true that the British economy is still too reliant on low paid jobs and has a poor record in moving people up the ladder 

James Moore
Chief Business Commentator
Monday 01 April 2019 11:05
A Deliveroo driver protesting over rates of pay
A Deliveroo driver protesting over rates of pay

Happy 20th birthday to the minimum good wage. There aren’t very many thoroughly good things about Britain at the moment but it is one of them.

There’s a present today for those on it too, in the form of an inflation busting 4.9 per cent rise to £8.21 an hour.

The celebrations will be somewhat muted, however. Bills are rising, and what the government now refers to as the National Living Wage is still a long way off from being a real living wage.

The Living Wage Foundation, which operates a voluntary accreditation scheme for progressive minded employers, says you need to earn £9 an hour outside London to afford a decent basic standard of living. Moreover, as I’ve written before Britain has a poor record when it comes to sustainably getting people out of low paid work and into the sort of jobs which provide something better.

Still, it’s important that a floor has been created, and that it has been rising at a good clip (of late).

Remember how the critics, mostly on the right, wailed about how it would cost jobs and should be kept low. Erm…

The battle between Labour and the Tories now is on who can increase it at the fastest rate. You could call it a welcome war.

Another positive to have emerged recently is the more aggressive approach to enforcement.

It has helped that HM Revenue & Customs has been given the funding to do the job. It’s said that where there’s a will there’s a way, but cash helps a lot more.

There are still far too many people receiving less than they are entitled to, so it is to be hoped that this continues.

Perhaps the most important job as the wage enters its third decade is for the Government to properly get to grips with the problem of employers that seek to evade it not so much by breaking the rules but by getting around them. I'm talking here about the companies at the forefront of the so called ‘gig economy’.

Back in 2017, Matthew Taylor, a former advisor to Tony Blair, made a series of recommendations for reform as part of a government sponsored review into modern working practices. They weren’t exactly radical, but they spent a long time in the Whitehall long grass nonetheless.

Legislation has lately promised, but it seems to have been sucked into the Brexit swamp along with everything else.

Unions have, meanwhile, taken the battle to the courts, through backing cases against firms like Deliveroo and Uber, whose workers frequently miss out on the protections offered by the minimum wage rules, and other employment legislation. Cases are mostly working their way through appeals processes, but the early battles were won by the workers.

For its part, the TUC is worried that gig firms may simply try to adapt their models in response to whatever new rules the government eventually comes up with, and whatever the courts finally say.

To deal with this, it would like workers to be given more power to more easily challenge gig firms, and to be able to do so collectively. This could be achieved with the assistance of a body like the conciliation service ACAS.

As an approach, it could have potential. So would a greater willingness on the part of government to work with unions on issues like this, rather than it constantly characterising them as the enemy.

Regardless, the British economy is far too reliant on insecure and poorly paid labour. Addressing the issue should be a priority for the next 20 years of the wage’s life.

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