National Minimum Wage

National Minimum Wage
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using both the RPI and CPI measures. If, however, the wages of the lowest paid were
assumed to increase in line with inflation, estimated coverage of the adult rate in April 2013
would be similar to the numbers paid below the adult rate of £5.93 in April 2011, fewer than
140,000 workers (or around 0.5 per cent of the workforce).
5.92 We have recommended that the Youth Development Rate and the 16-17 Year Old Rate are
frozen. Assuming that young workers’ wages increase in line with average earnings, it is
estimated that 40,000 jobs held by those aged 18-20 would be covered by the Youth
Development Rate in April 2013, representing around 3.6 per cent of jobs held by these
young workers. It is also estimated that 14,000 jobs (5.2 per cent) held by 16-17 year olds
would be covered by the 16-17 Year Old Rate in April 2013. However, if the wages of young
people continue to grow at a slower rate than for adults, the actual coverage will be much
greater than these estimates.
5.93 Overall, the total coverage in April 2013 of the minimum wage, excluding apprentices, is
estimated to be 992,000 jobs (3.8 per cent of all jobs), if the wages of the low paid were to
increase by average earnings between April 2011 and April 2013. This is 36,000 or 0.2
percentage points lower than the estimated coverage in April 2012.
Table 5.2: Estimated Number and Percentage of Jobs Covered by the Recommended
National Minimum Wage Upratings, UK, 2012-2013
April 2012 April 2013
NMW rates Coverage NMW rates Coverage
970,000 938,000
Adult rate (aged 21 and over) £6.08 £6.19
4.0% 3.8%
44,000 40,000
Youth Development Rate (18-20 year olds) £4.98 £4.98
4.0% 3.6%
14,000 14,000
16-17 Year Old Rate £3.68 £3.68
5.6% 5.2%
Total
1,028,000 992,000
4.0% 3.8%
Source: LPC estimates based on ASHE, 2007 methodology, low-pay weights, including those not on adult rates of pay, UK, April 2011;
and OBR quarterly earnings forecasts (November 2011), UK, 2011-2013.
5.94 As we discussed in Chapter 2, women are more likely than men to be working in low-paid
jobs. Based on these earnings assumptions, it is estimated that in April 2013 the adult
minimum wage would cover around 366,000 jobs (3.0 per cent) held by men and 571,000
jobs (4.7 per cent) held by women. Jobs held by women aged 21 and over would be
expected to make up just under two-thirds of all jobs covered by the adult rate.
5.95 Using data from the BIS Apprentice Pay Survey, 14.5 per cent of all apprentices were paid
below the uprating we are recommending for the Apprentice Rate. If apprentice pay
increases in line with forecast average earnings between April 2011 and April 2013, it is
estimated that the Apprentice Rate would cover 12.5 per cent of all apprentices.