Low-wage Britain

Submitted by Daniel_Randall on 10 November, 2004 - 9:18

The government’s paltry minimum wage — £4.50 per hour for workers over 21 and just £3.80 per hour for workers between 18 and 21 — has been the cause of a great deal of discontent in the labour movement, particularly over the apparent assumption that under-21s need less to eat.

By Mike Rowley

However, this is not the only problem with the system. The new Annual Survey of Hours and Earnings has revealed that 272,000 workers in Britain are paid less than the minimum wage.

This represents 1.1% of all jobs in Britain, rising to 2.3% of part-time workers and 1.4% of women workers — a statistic explained by the greater number of women who work part-time. 2.4% of workers between 18 and 21 are paid less even than the lower rate of the minimum wage.

Clearly the most vulnerable workers are more likely to be low-paid; but more shocking still is the fact that not by any means all of these low wages are explained by what the Survey charmingly terms “non-compliance” by employers.

Certainly many employers do break the law, and it is indubitable that the number of workers paid below the minimum wage is significantly higher than the survey suggests.

The workers most vulnerable to low-paying bosses are the most difficult to gather information about — immigrants, working in sweatshops like the garment factories in East London which the GMB and No Sweat have campaigned to organise, or in agriculture, who are threatened with the government’s draconian immigration laws if they stand up for their rights under the same government’s labour laws.

However, many workers are paid below the minimum wage because they are legally excluded from it. Such workers include those in the government’s “Modern Apprenticeship” scheme, which is about as modern as Oliver Twist. The most vulnerable group in this respect, though, is homeworkers.

The National Group on Homeworking has found that employers, such as the major retail chains, that “contract out” work to companies employing homeworkers, avoid paying the minimum wage by pretending that homeworkers are self-employed or casual workers not entitled to the minimum wage, or by paying piece-rates while setting an impossible target for hourly production.

Positively Stakhanovite exertions are required to receive anything like the minimum wage.
Homeworkers who assert their rights are often immediately sacked.

The NGH is campaigning with the TUC, Oxfam and No Sweat to end this loophole in the law by putting pressure on employers and forcing the government to give homeworkers the same wage rights, union rights and employment protection as other workers.

Such a campaign is particularly potent at this time of year, when the Christmas cheer that comes in a box from your local supermarket is usually assembled, labelled and packaged down the road by homeworkers on miserable pay and often in unsafe conditions.

As one homeworker involved in the NGH commented, “They can do what they want, you have no employment rights. The company have you on a string, at their convenience and this should not be allowed!”

The number of jobs paid below the national minimum wage in the UK was 272,000 in Spring 2004, amounting to 1.1 per cent of all jobs in the labour market. The estimate has been produced using a new methodology based solely on the Annual Survey of Hours and Earnings, which replaces the New Earnings Survey.

The Annual Survey of Hours and Earnings includes extra survey samples in 2004 to improve coverage of the low end of the pay distribution. The Labour Force Survey is no longer used to contribute to the estimates.

There are two rates for the national minimum wage: one for those aged between 18 and 21 (£3.80 per hour) and one for those aged 22 and over (£4.50 per hour). In spring 2004, 45,000 jobs (2.4 per cent) held by those aged 18 to 21 were paid below £3.80 per hour.

Among those aged 22 and over, 227,000 jobs (1.0 per cent) were paid below £4.50 per hour.
People in part-time work were over three times as likely as people in full-time work to be paid less than minimum wage, with 2.3 per cent of part-time jobs and 0.7 per cent of full-time jobs falling below the minimum wage.

Jobs held by women were almost twice as likely to fall below the minimum wage as jobs held by men (1.4 per cent compared with 0.8 per cent). This was entirely due to the greater number of women in part-time jobs.

It is important to note that these estimates do not measure non-compliance with the national minimum wage legislation. The survey used to provide these estimates does not indicate whether individuals fall into a category that is exempt from the legislation, such as apprentices or new trainees.

But some of it must be non-compliance…

Many home workers paid below the national minimum wage do work that is contracted out by companies like the big supermarkets, Tesco, for example.

According to the National Group on Home working when attempts are made to claim it people lose work. Because of loop holes in the law such workers can be classified as self-employed and therefore low wages are not covered by minimum wage legislation.

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