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National Minimum Wage increased

The National Minimum Wage (NMW) has been increased this week by 15p to £6.08 per hour, for adults aged 21 or over. At the same time, the development rate, for those aged 18-20 has gone up by 6p to £4.98 per hour, and for those in the 16-17 year old category the rate has risen by 4p to £3.68 per hour. There is also an ‘apprentice rate’ which has risen by 10p to £2.60.

The National Minimum Wage has been raised to £6.08 an hour.

The NMW is set by the Low Pay Commission and has been in place since 1999, when it was introduced at an adult rate of £3.60 per hour. Since its inception the NMW has risen by nearly 65% up to October 2010. Over this period, the increase was much higher than price inflation or average earnings growth.

What difference has this made? According to the Low Pay Commission it has not significantly adversely affected employment but they say that it may have had a small negative effect on hours. Some employers choose to keep their wage bill constant by reducing the number of hours per week that they employ their workers on minimum wage.

The Low Pay Commission has kept increases lower for younger workers this year because of the high level of youth unemployment, in an attempt to persuade employers to keep younger workers in existing employment.

The TUC has estimated that the increase this year will be to the advantage of almost 900,000 workers, most of whom will be female.

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Posted in Earnings, Minimum Wage

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