Labour will increase the minimum wage to £10 an hour if they win the next general election, party leader Jeremy Corbyn has announced.
According to Corbyn, employees on basic earnings would be better off by thousands in 2020 compared to the current expected rate under the government’s national living wage.
The Labour leader said: “The government’s rebranding of the minimum wage to the National Living Wage hasn’t dealt with the real problems of low pay and rising cost of living.
“That’s why Labour will raise the legal minimum wage for all to at least £10 an hour by 2020, giving more than five and a half million people a pay rise in the process.
“Labour’s real living wage will immediately boost the incomes and opportunities of more than 20% of the workforce, especially in sectors such as retail, care and hospitality.
“We know that where work pays, living standards rise and reliance on benefits falls. This is the right thing to do, and a Labour government will be committed to rebalancing our economy so that no one and no community is left behind.”
Commenting on Corbyn’s promise, Mark Littlewood, director general at the Institute of Economic Affairs said: “Raising the minimum wage so sharply would put the jobs of low-skilled workers and those in part-time work at risk.
“We have already seen companies in the retail, food and social care sectors scrap in-work perks, withdraw overtime and Sunday pay, and cut hours in an attempt to offset the costs of the National Living Wage – proof that arbitrarily instituting wage increases does nothing for the workers it is attempting to help.
“The ones who will really feel the effects of such a measure are those in part-time work, a large proportion of whom are women; young workers; and ethnic minorities – a disproportionate number of whom work in low-paid or low-skilled jobs. It’s quite baffling how the Labour Party are even contemplating a policy that will hurt the groups of people they claim to protect.”