National Minimum Wage Essay
The National Minimum Wage is established as a legal right applied for all workers in the United Kingdom. Established on April 1st 1999, the purpose was to prevent any kind of exploitation of workers through unnecessarily low pay. The support for national minimum wage has always been phenomenally high. Even when the idea was introduced it won an 88% majority endorsement in the UK. (Jowell 2000). This essay will concentrate on the effects of an established minimum wage on women in particular.
This minimum wage rate applies to part-time workers, casual workers, agency workers and home workers. However, a large group is also excluded from the laws applying to minimum wage: self-employed, voluntary workers and workers who have citizenship from outside the United Kingdom. Thus, while a majority is given fair pay in the country another majority is denied the rights to a basic minimum wage. This can be seen as a wager against the equality and justice minimum wages are to set up as is their role to improve economic efficiency.
A number of critics of the national minimum wage stood against it because of the great degree of gender discrimination in the field of employment (Morris & O’Donnell). Most of the workers who are covered by minimum wage rates are women. Not only does this affect the bargaining powers of trade unions, but fellow male employees see these women as responsible for taking up jobs that could have been held by men. Thus, while the rights of some are usurped, the minimum wage rate ensures the participation of women in the workforce and allows them an equal stand with their male counterparts. It is for this reason that the minimum wage affected part-time female workers to the highest degree when it was first implemented. A total of 19.75% women were affected by the minimum pay rate showing that women’s employment is equal to that of men since 1999 (Low Pay Commission) . Thus, the gender bias often lead male counterparts to dislike the wage rate given set up because it encouraged pay and equality given to women. Also, statistics showed that this minimum wage did not affect women alone. Young workers, retired employees’ ethnic minorities, workers with disability and even those with no qualifications also benefit greatly from the minimum wage. In fact, many ethnic and immigrant workers were seen as possessing an increasing rate of employment compared to the residents of the UK (Sciarra 2009).
The young group is also seen as facing a detrimental effect due to the implementation of minimum wage. The economic recession hit the youth the worst and reduced any chances of them earning more than the older employees in the labor market. Yet, the justification given for this is that the low wage rates are enforced to protect the older and experienced workers also allowing the young to gain sufficient training before they enter the labor market (Starr 1993).
However, there has been a great degree of criticism applied to the idea of a minimum wage rate (Davies 2004). First and foremost is the method through which employers respond to the wage rate. Not only are ideas like overtime and unsocial work hours omitted from the rates paid but it also allows the employee’s total earnings to fall while their basic pay increases. This was proven in research carried out by the Low Pay Commission who discovered that a rise in wage rates in 2003 and 2006 were reduced in their impact because of the adjustments made by industries to lower their effect: changing pay structures and non-wage costs (2009). Thus, the minimum wage rates show no increase in productivity because the employers used other methods to control their profits. This was ample proof that the minimum wage rate was still incapable of creating an impact on the economy.
Yet, it is the lowest paying industries that make the biggest differences in the number of jobs giving minimum wage rate. In the UK, the ten low-paying industries are responsible for hiring 8.4 million jobs which are a third of the entire job market in the UK (Low Pay Commission). In 2007 and 2008, when the economy of the UK went into recession, it was these low-paying industries that continued to create an impact on the proportion of jobs available with a rise in jobs giving minimum pay: cleaning and social care. Thus, the individual employed in low-paying labor continued to retain their job However, the fall in economy did affect some industries like the ones involved in retail and hospitality which had an impact because of the decline in consumer spending. This was against the rise of jobs in social care: security and hair dressing. Thus, it is impossible to determine if low wage rate was indeed the factor which allowed many to keep their jobs.
Therefore, the minimum wage rate has come a long way since its decade of establishment: since its creation before and after recession. While it seems to have favored groups like women and ethnicities it has affected the amount of non-wage pay benefits: such as bonuses that were previously enjoyed by many employees. The adjustments made by employers ensure that their profits are not reduced and instead hamper the true motive behind a minimum wage rate: equality and justice for workers coupled with economic efficiency. Thus, despite the introduction of this law, it is still weak in its attempts to being vastly equitable and efficient in the economic environment of the United Kingdom.
Business Link, Understanding minimum wage law, Available at: http://www.businesslink.gov.uk/bdotg/action/layer?=en&r.s=sc&r.l1=1073858787&r.lc=en&r.l3=1074402393&r.l2=1081657912&topicId=1074402393&r.i=1074404077&r.t=RESOURCES [Accessed July 31 2009]
Davies A C L (2004), Perspectives in Labor Law, Cambridge University Press
Jowell R (2000), British Social Attitudes, The 17th Report, London, Sage
Low Pay Commission (1999), The National Minimum Wage Accommodation Offset: A review by the Low Pay Commission, http://www.lowpay.gov.uk/lowpay/report/pdf/nmw_acco.pdf [Accessed July 31 2009]
Low Pay Commission (2009) May 2009: National Minimum Wage. Low Pay Commission Report 2009, Available at: http://www.lowpay.gov.uk/lowpay/report/pdf/7997-BERR-Low%20Pay%20Commission-WEB.pdf [Accessed July 31 2009]
Morris A & O’Donnell T (1999), Feminist perspectives on employment law, Routledge Cavendish, p. 31
Sciarra S (2009), The evolution of labor law (1992-2003), Offices for the Official Publication of Europe
Starr G (1993), Minimum Wage Fixing: An international review of practices and problems, Unipub