Low Pay Commission Consultation on the National Minimum Wage

EHRC response to the Low Pay Commission’s consultation on the national minimum wage

September 2010

Executive Summary

This year's terms of reference for the 2011 report, set by the Government, ask the Low Pay Commission (LPC) to monitor, evaluate and review the impact of the National Minimum Wage (NMW) and to make recommendations on the rates for October 2011. The LPC have been asked to look at how the minimum wage affects different groups of workers including in particular different age groups, women, ethnic minorities, people with disabilities and migrant workers. All of these groups, plus those that are unqualified, are more likely to be affected by the minimum wage than other groups and by the recession and all fall either directly or indirectly within the mandate of the Equality and Human Rights Commission (the Commission). The Low Pay Commission as a public body covered by the public sector equality duty legislation also has an obligation to assess the impact of any proposed changes.

Many low paying sectors have a high proportion of workers from across the equalities areas. The LPC identifies low paying sectors as those industries or occupations with a large number of minimum wage workers, or those in which a high proportion of jobs are paid at the minimum wage. Many low paying sectors, including hairdressing, childcare, retail and hospitality have a high proportion of women working in them. Gender segregation also features in apprenticeships, with schemes in certain sectors dominated by young men, providing better pay, prospects and development opportunities than those in sectors dominated by young women. This has a knock on effect on rates of pay for women in the longer term, and the gender pay gap.

Compared with white workers, ethnic minorities are more likely to work in part-time jobs and in low-paying occupations, although this varies by ethnic group. Disabled people are also more likely to work in low-paying sectors. Disabled and ethnic minority apprentices are segregated into particular sectors, but we do not know what the effect is on pay.

Migrant workers are not explicitly covered by the Commission’s remit but the ethnic composition and vulnerability of this group means that they fall indirectly within our remit. Our inquiry into recruitment and employment in the meat and poultry processing sector revealed widespread breaches of licensing standards including the NMW and the Gangmasters’ Licensing Authority’s (GLA) indicative rate. Compliance with and enforcement of the minimum wage is therefore extremely important to ensure that migrant workers are not being paid under the minimum wage.

The Commission’s research on pay gaps across the strands indicates that a range of measures are needed to reduce pay gaps and pay penalties. It is necessary to continue to take action to address unequal pay, workplace discrimination and develop measures to equalise pay in similar jobs across sectors. Tackling the gender pay gap requires social change, including further strategies to enable women and men to harmonise and share work and family life. Pay penalties are about both low pay and unequal pay. We need to understand more about what is driving the pay gaps and penalties for different groups. More analysis is needed into the relationship between pay gaps and religion.

Download the full consultation

Low pay Commission consultation on the national minimum wage (word)

Last Updated: 21 Sep 2010