One of the great achievements of the last period of Labour government was the introduction of the national minimum wage. In the face of ferocious Tory opposition, it established a basic principle that – as its name makes abundantly clear – no worker should get paid less than a statutory minimum. For two decades, there has been a broad consensus around this principle, if not around the levels it should be paid at. Until now, that is.
The spirit of that historic measure is now being undermined by the Conservative government, which is failing to protect minimum wage workers who have been furloughed as part of the job retention scheme. They will receive just 80% of their minimum wage salary.
The furlough scheme offers welcome protection for millions of people and the trade union movement can add its introduction to the list of achievements it has secured down the years. But the guarantee that employees will have 80% of their incomes protected is simply not enough for minimum wage workers. How can workers be expected to live on less than a state-declared minimum, especially given that rents, bills and food prices haven’t fallen?
Sadly, when I called on the Chancellor to put in place guarantees so that no furloughed worker lives on less than the national minimum wage, he outrageously replied suggesting that those workers should plug the gap by seeking additional employment during this crisis. His dismissive answer brought to mind the out-of-touch Norman Tebbit’s infamous ‘get on your bike and look for work’ sentiment.
This week’s job vacancy figures show just how completely divorced from reality the Chancellor’s suggestion is. Does he really think that minimum wage workers can find additional employment during this crisis when so many of the businesses they normally work in – be it bars, shops or hotels – are shut? Others can’t find work due to additional caring responsibilities during this crisis or, as some have told me, because their current employment contracts do not permit it.
While some may be able to just about get by with 80% of their salaries, low-paid workers certainly can’t afford this deep cut to their income. The current minimum wage is £8.72 for those aged 25 and over. Cutting that by a fifth during furlough means that a full-time worker could be over £280 per month worse off.
Yet the government guidance explicitly permits furloughed workers to get just 80% of their salary “even if, based on their usual working hours, this would be below their appropriate minimum wage”. Expecting lower-paid workers to live below the minimum will punish those already struggling most and deliberately thrust the lowest-paid workers into even greater poverty and hardship.
Nor will this just affect those previously on the minimum wage. Many others will be dragged under the minimum wage rates if they’re only getting 80% of their previous wage. While the virus itself doesn’t discriminate, we have seen time after time how this crisis has widened pre-existing inequalities. The failure to protect minimum wage workers will deepen inequalities even further.
Around two million workers are directly affected by minimum wage rates and they are more likely to be women and work part-time and in occupations such as retail and hospitality, which have been hit hard by this crisis. Black, Asian and minority ethnic (BAME) workers are more likely to be in lower-paid work. The government’s approach on the furloughing of minimum wage workers heaps inequality upon inequality and injustice upon injustice.
The furlough system has a ceiling of £2,500 per month. It also needs a floor that protects worker’s wages through this crisis. Across the labour movement, all of us who wish to defend the principle of the minimum wage need to be pressuring the government to change its mind and ensure no worker is paid less than this hard fought for minimum wage during this crisis.