Low pay or fair pay?

Madeline Bunting talks about the recently released report from of the TUC's Commission on Vulverable Employment in today's Guardian.

Having promised it would "make work pay", Labour still hasn't delivered.

Brown makes much of his commitment to poverty. Even his most grudging critics concede that some headway has been made on child poverty even if it has not been enough. Many poor families may now have an earner, but it has not got them out of poverty: the number of poor children living in working households is 1.4 million - exactly the same figure as it was in 1997.

Half of all children living in poverty have a parent in work. The advances in child poverty have been among those on benefits, while the number of poor working households with children has actually increased by 200,000.

One in seven of all working households are poor; one fifth of all workers, 5.3 million people, are paid less than £6.67 an hour (two thirds of the median), the worst low-pay rate of any in Europe. It works out at less than a £12,000 salary.

In some regions, the proportion of low-paid is well over 25%, while in some constituencies (in Wales, Birmingham, the West Midlands, even the rural West Country) it is comfortably over 40%.

Labour has made much of bringing in the minimum wage and the working time directive (which gave many workers their first rights to paid holiday) but after these advances, the reality is that progress in tackling Britain's chronic problem with low-paid, insecure work stalled. Increases in the minimum wage are not keeping pace with average earnings, and it is set at a considerably lower rate than in other countries.

This is an issue that any Labour government worthy of its name should have sorted out by now and yet it has devoted a fraction of the effort and energy required. If Labour cannot ensure that at the end of a hard week's work, someone has earned enough to keep themselves and their children out of poverty, then it doesn't deserve power.

The Government announced in March that the adult minimum wage rate will rise from £5.52 to £5.73 an hour in October. The youth rate for those aged 18 to 21 will be increased from £4.60 to £4.77. The Government has also said that the rate for workers aged 16-17 years should increase from £3.40 to £3.53.

So for someone currently working 40 hours a week this means they earn £220 per week or nearly £11,500 a year. A single person, with no dependants, earning this amount and receiving no other benefits is entitled to an annual Working Tax Credit of £504.05 (calculated using the HM Revenue and Customs Tax Credits caluclator). Surely the whole point of the Minimum Wage is that it should be enough to remove single people from the need for benefits?