Minimum Wage

The national minimum wage (NMW) is often confused with the living wage.  The later being the basic level of income required to live on if one is in a household of one person with only one income whereas the national minimum wage can relate to work regardless of whether or not it is the primary income or even the income of the primary earner in a household.

Setting the level for the minimum wage is fraught with difficulties.  Setting it too low and it is broadly meaningless.  Setting it too high and it can affect employment.

Setting a rate for the whole country can mean that if it is set close to the living wage for Londoners it could be too high for other parts of the country and make employers less likely to hire.

In America this is dealt with by a lower floor rate across the whole country with the possibility of each state, county or city setting a higher rate that suits their local conditions.

This is something that we could follow in Britain.  For example, a rate for a minimum wage in Elmbridge where the cost of living is high would be set higher to meet local needs. This would not directly impact the rate in other parts of the country and therefore undermine the need for more employment in those areas.

In government Vince Cable delivered the largest increase in minimum wage since 2007, benefiting over 1.4million lower-paid workers. Someone working full-time on the NMW has seen their salary increase by over £416.

According to the current trajectory the minimum wage is due to rise to £8.23 by October 2019.

Under Liberal Democrat plans people on the minimum wage working 35hrs a week will be £263 better off under Liberal Democrats as a consequence of our plans to increase the personal allowance to £12,500.