Minimum wage rises to £5.05 an hour (UK)

[Rose Siding]

The adult national minimum wage is to rise from £4.85 an hour to £5.05 from October and £5.35 in 2006, Tony Blair announced today.

The Prime Minister said that the increase would affect around 1.4 million workers, with women particularly benefiting.

The rate for 18 to 21-year-olds will rise from £4.10 to £4.25.

Speaking at his monthly press conference in 10 Downing Street, Mr Blair said the minimum wage was "a powerful symbol of how this country is changing for the good"....

"The benefit of Britain's strong and stable economy should be shared by every hard-working family in Britain and by middle-income and low-income families alike.

"For too long, poverty pay capped the aspiration and prosperity of far too many hard-working families. Too often, people were told to make a choice between the indignity of unemployment or the humiliation of poverty pay."

http://news.independent.co.uk/uk/politics/story.jsp?story=614635

About $10.20 an hour, right?

[Sannum]

1. Oh my god!!!

I'm moving to Britain! That is what the management makes at my small company!

[sasquatch]

2. I think it's $15 dollars an hour American

[KDLarsen]

4. According to the UCC, it's 10$

www.xe.com/ucc/

[Massacure]

3. XE.com says that is equivalent to $9.69.

[Rose Siding]

5. And the £5.35 by 06?

More than here anyway! Is the cost of living much higher in the UK?

[Massacure]

6. $10.26 or $10.27. I'm not sure which way money rounds.

$10.2683 is the exact.

Things are more expensive but don't ask me how much.

[omulcol]

12. £5.05p will generally buy you ,

One pack of cigarettes, or

Five litres of Gasoline ( petrol ) .

The cost of living in the United Kingdom is divided into North - South comparisons... generally speaking - with prices considered highest in the South of England.

The minimum wage provides the lowest possible income to survive the costs of living in the UK - regardless of area - so those earning £5.05p per hour, in the South are, in my opinion, on the poverty line.
In Brighton, hotel, and "Casual", workers are very low paid, but everything else - including rents - are expensive in comparison .

A generalisation would be,

Wage for 40 hour week @ £5.05 = £202.00
Income Tax, @ 18% & National Insurance = £50.00 approx'
Net Income £152.00p

Minimum rent on One Room Bedsit ( an area less than 18sq metres), no seperate kitchen, bedroom, toilet or bathroom = £70.00 per week.. No central heating or hot water provided.

Food = minimum basics & personal items = £25.00 p.w.
Gas & Electricity consumption approx', £8.00 p.w.
Council Tax £21.00 per week ( voter eligible)

Spending £124.00 just to survive - with £28 remaining for clothes, entertainment, holidays, savings( ha ha ) the following may illustrate further hardships to a single individual.

Television Licence = £2.50 p.w.
Minimum bus ride = £2.60 regardless of local destination.
Mobile Phone top-up charge .... forget it ! ( £10.00)
Internet Broadband ....... forget it ( £20.00 per month)

One pint Beer = £2.80.
MacDonalds cheeseburger = £0.99p
One ( drinkable) coffee £1.20 : One basic nice = £1.80.
Entry to nightclub average = £8.00
Nightclub beer = £3.50 pint. / bottle Bacardy Breezer £2.50 (?)
Chinese Take-Away for 2 = £14.00 - £17.00

The list could go on but the danger is in converting the UK minimum wage of £5.05 per hour.... into American Dollars.
Thousands of migrant workers from Eastern Europe make the same mistake before coming here, only to realise the UK is a nation of money-grabbers - rather than money-givers !

England pays more than USA and Europe for virtually everything, from Food, cars, CDs, Computers to downloading iTunes.

Any single individual earning less than £30,000 per year in the South of England is struggling to make ends meet .... and I know because I'm struggling !!!!
What the hell ........ cheers !
:beer:

[tinnypriv]

21. Nice post

:toast:

But you forget that cheapskates can always go with Doner Meat and Chips instead of your expensive Chinese on the list! ;)

[Delphinus]

22. Very nicely delineated.

Thanks for sharing that and I feel for you on the struggle of making ends meet.

It's after noon here, so I'll have a drink with you. :toast:

[punpirate]

7. At current exchange rates...

... the 2005 adult rate would be $9.67/hr, and the 2006 rate would be $10.24/hr.

Keep in mind, though, that Brits pay income tax and a 17% EU VAT on many purchases.

Still, it's an indication that the US is behind on reconsidering this. US minimum wage law was last changed in the early `90s, with the last increment of that change, to $5.15/hr, kicking in around 1997, now eight years ago.

I think it's one of the more shameful failures of Congress in not addressing this lack, particularly since affordable housing has all but disappeared with concerted efforts over the years to defund HUD.

There's some short history of the minimum wage, and some comparisons here:

http://www.iaba.org/LAW%20REVIEW/Gibson_Eun_Min_Wag_Amer.htm

[Dark]

9. Yea, but they also get free healthcare and education, right? n/t

[punpirate]

10. Well, no, not exactly...

... health care and pension are covered under an additional percentage of income (although they do have what amounts to a single-payer system for that percentage paid).

Brits could answer this better, but I think there's an exemption for low-wage earners making about $175 a week or less. They don't pay. Over that, health and pension is 11%, I believe.

The health system has degraded some due to changes instituted during the Thatcher/Major terms, though.

As for free higher education, I don't think so, but again, Brits could answer the question better. As I recall, last year, there was a standard fee of about $2000/yr for tuition, but there's been some attempt to change that to a sliding scale with the highest fees (about $5800/yr) going to the most prestigious institutions. I don't know if that plan or a variant on it passed Parliament.

On edit, I should add that there seems to be a fairly broad partial or total exemption of tuition fees for low-income students, or students from low-income families, so the effective tuition rate for the average student of low to modest means may be more like $1000/yr.

Cheers.

[Vladimir]

23. The higher education

is indeed on a sliding scale now, payable after graduation. A few points worth noting:

1) There is a means tested grant scheme for the poorest, of up to 3,000 pounds per annum (covering the tuition fees basically). There is no examption from the fees though, and no help with the living costs, so for almost all students the grant money will go into paying for accomodation, food etc. As it will be insufficient for even that, a student on full grant and a 3 year course can still expect to leave uni at least 12,000 pounds in debt (23,500 dollars or so).

2) The repayment doesn't start until a person is earning 15,000+ pounds per annum, but it does figure into one's credit rating before that.

3) Although there is a sliding scale, almost no-one charges less than the top amount, so in practice its still a flat fee.

[Spacejet]

14. The tax doesn't matter

because unlike the states England doesn't tax the lower classes (read: those making minimum wage) the hardest.

[omulcol]

16. Errr ... not correct ....

The standard base tax rate is 22% on earnings of £2 021 - and up to £31, 400. per year.

Anyone earning the minimum wage of £5.05 per hour ( £5000 per year) for the standard 40 hours will pay 22%..

There are certain benefits in place for those who qualify - to ensure Minimum Living Standards are maintained - of which Housing Benefit and Council Tax relief are two examples.
So although an individual worker may fall below this minimum Living standard - then qualify to be assisted by the government - that person still pays the normal rate of Income Tax @ 22% - even though he qualifies for relief.

There IS a lower rate Tax of 10% - but this applies to those earning less than £40.00 per week, which is an entirely different subject with different criteria attached - since it doesn't fall within the subject of Minimum Wage levels.

[AP]

8. Go Labour. Putting money into the pockets of people who work for a living.

I hope people appreciate this when the go to the polls.

[daleo]

13. It does seem that Blair has done some good things.

A pity about Iraq, though.

[omulcol]

17. Like

putting his hands around our throats and throttling us - then handing us a chewing gum.... so we'll continue to like him !

If you look closer you'll see Blair has taxed, taxed, taxed, and taxed this country out of all proportion - and given nothing in return except chaos.

The rest of my rant was deleted to save y'all the misery of depression !!!!!!

[Historic NY]

11. Things are pretty expensive in the UK and even with this increase people

are barely keeping up. Check the consumer prices, for clothing, fuel & rent and you will see 5lb 5p does not go far. It sounds great compared to US wages until you do the math our dollar is worth about 52 cents to the pound. London is one of my favorite destinations but with the decline of the dollar its now down right expensive. If you look at the following tables that fiver really doesn't go far.

UK cost of Accommodation
Flat-Share Rental per month One Bedroom Flat Rental per month
East London £400 East London £600
West London £500 West London £700
South London £400 South London £600
North London £500 North London £700

UK cost of Food & Drink
Average weekly grocery bill £60
Average pub meal £6
Average restaurant meal £18
Pint of beer £2.50 - £3
Average bottle of wine £8
Average meal for two in mid-priced restaurant £40

UK cost of Transportation
Weekly Zone 1-6 Travelcard £30
Monthly Zone 1-2 Travelcard £70
Train trip to Edinburgh £92
Train trip to Cambridge / Brighton £20
Avg mid-sized car rental for a weekend £70
Return budget flight to Spain £150
Eurostar return ticket to Paris £110
Return flight to Ireland £100

UK cost of Entertainment
Movie £7-£10
West End play £25

http://www.workgateways.com/working-cost-of-living.html

[phusion]

15. These are prices in London though, eh?

Aren't things more expensive in NYC than the rest of the US?

Interesting info, though...thanks.

[muriel_volestrangler]

20. £5.05=$8.17: the OECD publishes Purchasing Power Parity tables

which should give an idea of the true cost of living comparison between developed countries (it's less accurate between developed and developing countries because of big imbalances in the prices of different goods and services).

http://www.oecd.org/dataoecd/61/54/18598754.pdf

For 2004, 1 US dollar = 0.618 British pounds (£1 = $1.62)

So £5.05 is $8.17.

[sweetheart]

18. good news, unfotunate the timing appears as an election giveaway

That Bliar only acts when it gets him re-elected is less inspiring,
despite the good news of this wise move.

[indepat]

19. The worsening of poverty is at the heart of neocon ideology