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Minimum wage falls below inflation

Tuesday April 17th 2012

The value of the minimum wage for workers in the UK is set to fall to its lowest real level for eight years, according to new data.

According to a report from the Resolution Foundation think tank, the £6.19 minimum wage is worth the least it has been in real terms since 2004, and that last year's 11p rise was the third below-inflation hike in a row.

In the think tank's report, which was written by Professor Alan Manning of the London School of Economics, Professor Manning said that while caution by the government was justified given the economic climate the weakness of the increases in minimum wage reflected how the effect of the wage has "stalled".

Commenting on the report, Resolution Foundation's senior analyst said: "After 13 years of detailed studies into its impact, the benefits of the national minimum wage are now beyond doubt.

"It has boosted wages for some of the poorest paid people in the country and helped make sure work pays, without causing job losses.

"The question now is what role it can play in the future to raise living standards even further."

Copyright Press Association 2012

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