Pay rise for a million workers

The minimum wage is set to go up again this October...

Sick of reading bad news about the economy and the state of the nation's finances all the time?

Well, guess what?

For a change, we have some good news: nearly one million workers will be better off this year, thanks to an increase in the minimum wage.

The increase will come into effect on 1 October 2011.

Low-paid workers stand to gain as follows:

Apprentices under the age of 19 and older apprentices in the first year of apprenticeship will also see a 4% increase in the minimum wage to £2.60, up from the current £2.50.

The Trades Union Congress described the rises as 'relatively modest' but said they would provide a welcome pay boost for around 840,000 low-paid workers in the UK. What's more, the TUC said the increases should stimulate local economies where workers spend their wages, and that there would be room for further increases once the economy started to recover.

Every little helps?

But although these increases will be welcomed by low-paid workers, they won’t have anyone jumping for joy. For example, an employee working a forty-hour week at the highest minimum wage will only get an extra £6 a week before deductions. Then again, over the course of 52 weeks, this comes to £312 before taxes, which is better than a slap in the face with a kipper!

On the other hand, it’s sometimes said that “one man’s pay rise is another man’s price rise”. In other words, some companies may use the higher minimum wage as an excuse to pass on price hikes to their customers.

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Other firms may decide to cut back, prune their wage bill and lay off some of their workforce.

The British Chambers of Commerce has criticised the pay rise, saying it's the wrong increase at the wrong time. And the priority should be getting people back into the job market. What's more, "youth unemployment is at a record high and we can't afford to price young people out of work."

Meanwhile, the Unite union has said the small increase will be completely outstripped by the current rate of inflation and will do little to help the lowest paid keep up with the rising cost of food and fuel.

I want a pay rise, too!

Overall, however, any increase in pay has to be good news - however small. But what if you earn more than the minimum wage, so aren’t set for a pay rise this week or indeed, any week in the near future? Obviously times are tough, and many of us are fighting to keep our jobs, never mind trying to increase our pay.

Still, you never know, if you deserve a pay rise, it can often be worth at least asking for one – and at least then, you’ll know you tried your best. Read Six top ways to pick up a pay rise and Get a pay rise tomorrow for tips on how be successful.

This article has been updated from an earlier version.

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