LONDON: British Business Secretary Vince Cable said that he will press a government commission to raise the minimum wage to ensure it is keeping up with the cost of living.
Cable believes the minimum hourly rate, which will rise to £6.31 ($10.01) for those aged 21 and over from October 1, has fallen in real terms by up to 12 percent since the 2008 financial crisis.
“We cannot go on forever in a low pay and low productivity world in which all we can say to workers is, ‘You have got to take a wage cut to keep your job,’” Cable told The Guardian in an interview published on its website on Friday.
“For a very long time, five or six years, wages have been suppressed in low wage sectors. I am sending a signal that we are entering a very different environment.” Cable hopes the increases would come into force over the next two to four years with Britain’s minimum wage first introduced at £3.60 ($5.71)an hour in 1999.
He said companies could be compensated for the extra costs of higher wages with a cut in the level of national insurance contributions paid by employers toward employee pensions and other state benefits.
As the British economy appears to recover, many workers feel they are not reaping the benefits due to pay cuts and wage freezes since the 2008 financial crisis.