Raising minimum wage rates to £10 per hour for workers aged 18 and over would boost the public finances by an estimated £5.6 billion a year and help ease the longest squeeze in incomes since the Napoleonic era for 9 million workers, according to new research for the UK’s biggest union, Unite.

The research conducted by Landman Economics, shows that increasing both the national living wage and national minimum wage to £10 per hour would boost net income on average by over £1,300 per year, with 5.2 million female workers and over three quarters (78 per cent) of young workers aged 18-20 benefiting.

Workers in hospitality and retail, where low pay is rife, would be the main winners of a rise. An increase in minimum wage rates to £10 per hour would see the incomes of three quarters of hospitality workers boosted along with two thirds of retail workers.

An ‘intermediate’ increase to £9 per hour for workers aged 25 and over, £8.70 for workers aged 21-24 and £8 per hour for workers aged 18-20 would benefit around 6.25 million workers according to the study.

The research comes ahead of tomorrow’s (Thursday 5 July) speech by shadow chancellor John McDonnell at Unite’s policy conference and a debate on raising minimum wage rates to £10 per hour. It also comes ahead of the second reading on Friday (6 July) of Holly Lynch MP’s private members bill on extending the national living wage to people under the age 25.

The research estimates that increased tax receipts, national insurance contributions and reduced expenditure on in-work benefits from increasing minimum wage rates to £10 per hour would add an additional £5.6 billion to the public finances per year.

Commenting Unite assistant general secretary Steve Turner said: “Workers’ wallets are running on empty and incomes are being squeezed by cuts to in-work benefits and the government’s chaotic introduction of Universal Credit.

“There is something desperately wrong with our economy when 60 per cent of people in poverty are living in working households and over one million food parcels are handed out each year. As in-work poverty grows, big business is benefitting from corporate welfare which is subsidising low pay across the economy in the form of in-work benefits.

“Increasing the minimum wage and national living wage to £10 per hour would be a huge boost for young workers and help end poverty pay rates that hospitality workers have to endure.

“It would be a virtuous circle helping ease the squeeze on incomes, while increasing the public finances through greater tax revenues and reduced spending on in-work benefits.

“A £10 per hour minimum wage would mean extra money in people’s pockets which would be spent in communities and on high streets across the UK. It would help breathe life into a flagging economy and make work pay.”

The report looks at the potential economic impact of an immediate increase in the UK national living wage and national minimum wage from their current rate of £7.83 per hour for workers aged 25 and over, £7.38 per hour for workers aged 21-24 and £5.90 per hour for workers aged 18-20, to £10 per hour for all workers aged 18 and over.


For further information please contact the Unite press office on 020 3371 2065 or Unite head of media and campaigns Alex Flynn on 020 3371 2066 or 07967 665869.

Notes to editors:

  • Unite is Britain and Ireland’s largest trade union with over 1.4 million members working across all sectors of the economy. The general secretary is Len McCluskey.