Overview

This bill mandates the Secretary of State to set a target for the Low Pay Commission to increase the National Minimum Wage (NMW) faster than median earnings over a five-year period. The Commission must report on progress and can create taskforces to address low pay in specific sectors, potentially recommending sector-specific minimum wage increases above the national rate.

Description

The bill introduces several key requirements:

• Target Setting: The Secretary of State must set a target for the Low Pay Commission to increase the NMW at a rate exceeding the growth of median earnings over five years.
• Reporting Requirements: The Commission must report to the Secretary of State on its progress towards this target. If the target is deemed unattainable, the Commission must provide evidence, recommendations for government action, and present these to Parliament.
• Taskforce Establishment: The Secretary of State must empower the Commission to create taskforces comprising employers, trade unions, and other stakeholders. These taskforces will focus on identifying and addressing low pay within particular sectors.
• Taskforce Powers: Taskforces can develop strategies to reduce low pay, publish plans to boost productivity in low-paying sectors, and even propose sector-specific minimum wage rates higher than the national NMW.

Government Spending

The bill doesn't directly specify government spending. However, meeting the increased minimum wage target could lead to increased costs for businesses, potentially impacting government revenue through reduced tax income and increased benefits claims. Conversely, a rising NMW could stimulate economic activity and increase overall tax revenue. The net impact on government spending remains uncertain and dependent on several economic factors.

Groups Affected

• Low-wage earners: Potentially benefit from a higher minimum wage.
• Businesses: May face increased labor costs, potentially leading to price increases or reduced profits, depending on their ability to absorb the increased costs.
• The Low Pay Commission: Takes on increased responsibilities for setting and achieving a specific target.
• Government: Faces the challenge of balancing the benefits of a higher minimum wage with potential economic consequences.
• Specific Sectors Identified by Taskforces: May see targeted interventions to address low pay if taskforces recommend sector-specific increases.

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