The depressing reality of the Minimum Wage – it’s already being cut

Earlier this week I wrote about Tory plans to slash the minimum wage or cut it (in real terms) by freezing it. The revelation that the Tories might make those on the Minimum Wage pay for an international crisis made by the richest in society caused predictable outrage.

Yet the reality is that the Minimum Wage has been falling – in real terms – for the past three years. As inflation bites, the rises in the Minimum Wage (especially for young people) haven’t been able to keep pace with the rising cost of living, as this chart (h/t: James Plunkett) shows:

The left hand side of the chart shows the increase in the minimum wage in cash terms, but the right hand side shows the reality of what that is worth to minimum wage earners. And there has been a significant slump in each year since 2009.

If the Tories actually freeze the Minimum Wage, the impact will be to significantly accelerate the pressure on household budgets for those on the Minimum Wage, which will drive these workers further into poverty.

So much for making work pay.