Below-inflation minimum wage rise won’t lift the pressure on hard-pressed families 

This weekend’s increase in the minimum wage won’t ‘lift the pressure’ on hard-pressed families, the TUC has warned.

The TUC highlighted that the minimum wage will rise below inflation and far lower than soaring food prices. Analysis by the union body shows that minimum wage workers will miss out on £124 this year as a result of the new rate not rising in line with CPI inflation. And this loss increases to £712 if the RPI measure of inflation (which takes into account housing costs) is used.

The TUC also highlighted that the minimum wage will go up (+9.7%) at just half the rate of current food prices (+18.3%). Had the minimum wage risen in line with grocery bills, low-paid workers would have pocketed an extra £1500 over the next year.

The end of the government’s energy bills support scheme will also ‘wipe out’ a significant chunk of the increase in the minimum wage. People will spend an additional £67 a month on energy bills from April – around half the monthly rise in the minimum wage for a full-time worker.

The union body says that even if inflation drops in the months ahead, many low-income families will continue to struggle with the cost of living. The TUC estimates that average energy bills this Spring (£2,500) will be worth 13% of the average minimum wage workers’ salary – compared to 7% in April 2021. And with food inflation at its highest in nearly half a century, budgets will be squeezed even further.

The TUC says the government must be far bolder in ending the scourge of poverty pay.

TUC General Secretary Paul Nowak said “Everyone who works for a living deserves to earn a decent living But tomorrow’s below-inflation increase to the minimum wage is not going to lift the pressure on hard-pressed families.”

“A large chunk is going to be wiped out by soaring energy bills. And with food prices shooting through the roof, many low-paid workers will not see a positive difference in their spending powerc“It’s time to put an end to low-pay Britain. That means getting the minimum wage to £15 per an hour as soon as possible. And it means introducing industry-wide Fair Pay Agreements so that all workers have a minimum set of pay and rights – starting with social care and the ferries sector.”

“Inflation may fall over the next year. But make no mistake – the cost of living nightmare is far from over. Millions are still living wage packet to wage packet. Unless we bring bills under control – and get pay rising in every corner of the country – families will keep lurching from crisis to crisis.”

	Annual Energy Price Cap / Energy Price Guarantee **	Monthly energy price cap / Energy Price Guarantee **	F/T Minimum Wage monthly earnings	Energy bills as % of FT min wage
Apr 21-Sep 21	£1,138	£94.83	£1,351	7%
April 23-June 23	£2,500	£208.33	£1,580	13%