UK to increase low-wage workers’ pay by more than inflation
Oct 24, 2021, 6:14 PM | Updated: Oct 25, 2021, 8:49 am
LONDON (AP) — Millions of low-pay workers in Britain will get an inflation-busting pay increase next year after the government said Monday it will legislate to raise the National Living Wage to 9.50 pounds ($13) an hour from the current rate of 8.91 pounds ($12.25).
Britain’s Treasury said the 6.6% increase, which will apply to workers age 23 and up starting in April, means a full-time worker making the living wage would get an increase of more than 1,000 pounds ($1,374.90) per year.
The increase is around double the current rate of inflation, which has gone up sharply in recent months following a big spike in energy costs, including at home and at the pump.
For workers ages 21 and 22, the government said it would increase the minimum wage to 9.18 pounds an hour ($12.62) from 8.36 pounds ($11.49).
Given that inflation is set to rise further in coming months and with a benefit top-up introduced at the start of the coronavirus pandemic withdrawn, there are concerns as to whether the increase will be enough for people trying to make ends meet.
Nye Cominetti, senior economist at the Resolution Foundation think tank, noted that the headline increase would in fact be a “smaller real rise than some recent years” given that inflation is likely to be over 4% by April. Cominetti added that “there will be little protection for low income families from the cost of living crisis facing them this winter.”
The wage increases were announced as Treasury chief Rishi Sunak is preparing to release a budget statement on Wednesday, which could see further measures to address the high cost of living.
Sunak has little wiggle room though given the deterioration in the public finances during the pandemic. However, he is expected to announce another 5.9 billion pounds ($8.1 billion) to help the National Health Service deal with a backlog that has swelled during the pandemic.
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