Establishing a national minimum wage (NMW), and increasing it over time, “signals to citizens that they are right to expect a baseline of economic security through their labour” and has, rightly, been a popular and successful policy since it was introduced in 1998.

The Carnegie Trust UK and Learning and Work Institute have produced a report that covers both the successes and limitations of minimum wage policy over recent years. The report also offers recommendations to achieve sensible and sustainable future minimum wage increases. As the report says:

“although the pandemic has had a severe economic impact and many businesses are struggling, low paid workers need and deserve a pay rise.”

Recommendations start with the principle that the Government should maintain a commitment to increasing the NMW and includes several proposals to support this such as assistance for employers and sufficient social security support. There are also recommendations that consider variation to national minimum wage rates, such as further research on different rates by region and a youth minimum wage for under 21s. Most importantly for me are the recommendations around enforcement and the need to ensure NMW policy is placed firmly within a broader good work agenda including measures to boost employer investment in skills.

For several years now I have been campaigning for Government action to end the scandalous practice of unpaid internships. I have championed a Private Members Bill to amend the NMW Act to prohibit unpaid work experience for longer than four weeks. This change in the law would bring clarity to the existing grey area in which there is no legal classification of intern, thus unpaid work experience is permitted and if someone should be classified as a worker, as most interns would be, they should be paid. Employers don’t seem to be clear about the difference and interns are, understandably, reluctant to complain.

The Government claim to be getting tough on employers who use unpaid interns and have doubled the annual NMW compliance and enforcement budget to £27.4 million since 2015. Unfortunately, in the same period there are signs that the number of unpaid interns has actually increased. Enforcement is unequivocally an area that must be improved.

The report addresses the concern that “increases in the wage floor may lead to increased underpayment of the minimum wage.” The associated recommendation is that Government should use the upcoming Employment Bill to tackle the pernicious problem of underpayment of the NMW.

“This should include a well-resourced ‘know your rights’ campaign for workers, a ‘know your responsibilities’ campaign for employers, accompanied by stronger sanctions against employers that undercut the legal minimum and more robust enforcement.”

(my own emphasis added)

There is undoubtedly a need for stronger sanctions. The Employment Bill is expected later this year and is likely to include the introduction of a single labour market enforcement body to ensure that vulnerable workers are better informed of their rights, and to support businesses in compliance. This would be a welcome development.

Another welcome recommendation is an equivalent focus on a ‘good work agenda.’ This could, for example, include promoting sectoral collective agreements in which employers and workers agree common standards on pay, progression, and training for their sector, to sit alongside the minimum wage.

Establishing a national minimum wage, increasing it over time, and enforcing it properly ensures that citizens will, not only be able to expect economic security through their labour, but also be free of the pressure to work for free in a system that perpetuates privilege and exploits young people just as they are getting started in their working life.  

Chris’s Private Members Bill to end unpaid internships, Second Reading, House of Lords, 23 November 2018.

Tory Chris Holmes calls for HMRC to act over long unpaid internships, The Guardian, 18 Dec 2017

Unpaid Internships likened to modern slavery in Lords Debate, BBC, 27 October 2017

Unpaid Internships are a Stain on our Society, Politics Home, 8 June 2016

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