The Chartered Institute of Personnel and Development CIPD has called on the government to freeze the minimum wage for the young in order to tackle spiralling youth unemployment. UNISONActive: "What the CIPD should be arguing for in the context of the worst recession since the 1930s, is for a substantial increase in the minimum wage along with the implementation of a maximum wage to offset inflation, all within a progressive income tax system"
http://www.cipd.co.uk/pressoffice/_articles/_CIPDlaunchesmanifesto050110.htm
John Philpott, the CIPD’s chief economic adviser, said: “Pay restraint is likely to be a feature of the year ahead as employers and employees continue to work together to minimise job losses. It is right that younger workers lucky enough to have jobs should play their collective part in helping maximise the chances for those who do not.”
Announcing its pre-election "manifesto for work", Platform 2010 - A Recovery That Works, the CIPD also called for a freeze in public-sector pay, the abandonment of the employers’ national insurance increase in 2011 and the extension of the job guarantee scheme to those aged over 50 who are long-term unemployed.
What the Institute, who are lucky enough to have well paid jobs, fail to understand is that figures from the Joseph Rowntree Foundation reveal that in 2007-8 13.5 million people were living below the 60 per cent of the median earnings low-income threshold. This figure of 13.5m constitutes a growth of 1.5m over the three previous years.
The number of people living under 40 per cent of median income threshold has seen a year-on-year increase over the eight years preceding 2007-8. The number of people below this threshold is the highest since records began in 1979.
Yesterday (5 January) Dave Prentis, UNISON’s General Secretary, said:“This “manifesto” will not lead to economic recovery, it will lead to the exploitation of hundreds of thousands of workers. “The minimum wage for young people is low, and it is disgraceful that they are being targeted by the CIPD and singled out as being, “lucky enough to have jobs”.
“Vulnerable young people, who are struggling to get by on a starting rate of just £3.57 an hour, should not have to pay the price for greedy bankers’ mistakes.
“Those aged over 22 are expected to feed a family and pay their bills on just £5.80 per hour - calls to freeze the National Minimum Wage will not help the ‘lost generation’, it will fuel it.
“It is not right that public sector workers, who selflessly keep on our heating and lighting, care for our children, our sick and vulnerable, keep our roads and streets clean and safe, every day of the year, should be made to pay for the bankers' folly with pay freezes.
http://www.unison.org.uk/asppresspack/pressrelease_view.asp?id=1688
Prentis is absolutely right to criticise the CIPD for suggesting an already too low minimum wage should be frozen. In relation to prices, housing costs and other living expenses, the minimum wage has failed to keep pace with inflation. Over the course of its life the minimum wage has acted as a brake on wage increases, even during periods of economic growth.
Furthermore, by bolstering the minimum wage with benefits such as working tax credits, we have effectively been subsidising the profits of employers through the taxpayer. What the CIPD should be arguing for in the context of the worst recession since the 1930s, is for a substantial increase in the minimum wage along with the implementation of a maximum wage to offset inflation all within a progressive income tax system.
