Good News For A Million Workers

Despite the doom and gloom in financial markets, more than 1m employees can look forward to a guaranteed pay rise on 1 October.

They say that bad news sells newspapers. Given the state of the economy and financial markets, then the tabloids and broadsheets must be selling like hot cakes at the moment!

Hence, for a change, here's some good news: over one million workers will be better off this month, thanks to an increase in the miniumum wage. The increase came into effect on October 1st. Low-paid workers stand to gain as follows:

The Trades Union Congress claims that two-thirds of minimum-wage employees are female, so around 670,000 women and 330,000 men will receive this pay rise. Since the minimum wage came into effect in April 1999, it has increased by almost three-fifths (59%). This has helped to narrow the pay gap between male and female employees by around 5% in the past decade.

Every little helps

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 get an extra £8.40 a week before deductions. Then again, over the course of 52 weeks, this comes to £436.80 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. Other firms may decide to cut back, prune their wage bill and lay off some of their workforce.

Nevertheless, it's a fact that low-paid workers spend a high proportion of their income on the bare essentials of living, such as food, energy and transport. The price of these goods and services has soared over the last year, putting huge pressure on households with modest incomes. Hence, it would be churlish to complain about improvements aimed at those toward the lower end of the pay scale.

Top tips for restaurants

Finally, there's more good news for those working in the restaurant trade. Next year, the government will enact legislation to prevent restaurants using tips to bump up the pay of waiting and kitchen staff. At present, these employers can pay workers a sub-standard rate which is then topped up to the minimum wage using tips or service charges.

Personally, I want my gratuities to be paid directly to staff, rather than used to boost their employer's takings. Hence, I always ask whether tips go into a `tronc' (a fund managed and distributed by the staff) or are skimmed off by the restaurant. If in doubt, I always leave a cash tip, rather than adding it to my credit-card payment. What are your tips on tipping? Let us know below...

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