Industry experts discuss what the minimum wage should be set at

minimum wage

“The minimum wage does not alleviate low pay – which one in five workers suffers from. We prefer to talk about the ‘bite’ – setting a minimum wage at a proportion (we favour 60%) of whatever the average wage is. The £9 target the government wants for the National Living Wage will be 60% of what average earnings are expected to be by then, and we feel a calculation that links those at the top with those at the bottom is the right thing to do, especially as our research says it this won’t affect employment levels. However, the NLW will probably harm those thinking of paying the higher Living Wage – which is based on the cost of living. Bosses will not see a need to upgrade to it.” Connor D’Arcy, policy analyst, Resolution Foundation

“Wages alone won’t solve in-work poverty, but a strong National Minimum Wage is a good building block. The new National Living Wage will, by 2020, be equivalent to 60% of the UK average wage. This is positive, but doesn’t go far enough. That’s why we continue to promote a living wage. More than 1,800 businesses are accredited Living Wage employers, going significantly above the legal minimums. Why? Employers report increased productivity, reduced absenteeism and improved staff retention rates. Since the NLW announcement, rates of accreditation for the voluntary rate have continued apace. We hope the trend will continue. The race to the bottom has gone on far too long.” Sarah Vero, head of partnerships, Living Wage Foundation

“Businesses should always make staff welfare a priority. Within KPMG we support the voluntary Living Wage because we know it is good for our people, good for our business and ultimately good for society. It is not so much about a particular amount per hour, but more about giving all employees a sense of worth, regardless of whether or not they are directly employed or third-party contractors. The Living Wage Foundation uses a tried and tested process, supported by a wide range of stakeholders, to calculate what a family needs to live on. It is not perfect, but it draws strength from ordinary people, who have modest aspirations about what they really need, rather than just surviving.” Mike Kelly, head of living wage, KPMG