Columnist

14 years of the National Minimum Wage

The National Minimum Wage is celebrating its 14th anniversary this year, having been introduced in 1999 by the Labour Party. According to the Office for National Statistics, in 1998 there were some 1.28 million employees earning less than what would be the minimum wage for their age group.

In the late nineties, the chief concern among business owners was that it would bring hardship to some companies and would force them to lay off staff, send their work abroad or even cease trading. Some companies that did not directly employ low-paid staff expressed concern that there would be a knock-on effect if their suppliers were forced to increase their rates.

In a survey of ten HR advisers conducted by Peninsula Business Services in September 2014, 100% of those asked agreed with the existence of a national minimum wage.

Seven of the ten surveyed thought that there was enough publicity about rises in the minimum wage. Even if there is not widespread coverage on the mainstream media, there is coverage in business journals, and accountants and human resources will usually make it their business to advise on increases.

Of the ten respondents, seven had had no experience of minimum wage disputes being elevated to tribunal level. This would tally with the first two questions, which showed negligible employer resistance and a generally good level of awareness of the rates.

Peninsula found that the National Minimum Wage does not seem to be causing hardship to the clients dealt with by its advisers, with all ten advisers stating that they have never witnessed any financial struggles as a result of the policy.

One adviser stated: “Although there was a massive outcry when the NMW was implemented, employers have accepted this and understand there is no alternative. However, some companies still use payment in cash as a way of getting out of liabilities in respect of employment law.”

If there is an overwhelming opinion about the implementation of the minimum wage, it is that the initial fears have not come to fruition and that business in general is coping well with the implementation. Now that the National Minimum Wage is becoming a part of everyday life, it is likely that the world will move towards a situation where minimum wages will be enforced in more jurisdictions.

The UK is one of many developed nations to have adopted a legally enforceable minimum wage, and in the current political and business climate a kind of equilibrium seems to have been reached. As long as those choosing the rates and enforcing them are taking advice from the appropriate groups on both sides and acting responsibly, the minimum wage should continue to be of benefit to the most vulnerable among us – and therefore to society as a whole.

Peninsula Business Services was founded in 1983 and is headquartered in Manchester. It employs over a thousand staff in the UK, Ireland and Australia, and looks after more than 28,000 businesses.

This was posted in Bdaily's Members' News section by Carl Eden .