TUC calls for minimum wage to rise to £15, as top CEOs see pay increase by almost 40% in a year

The minimum wage should be increased to £15 per hour, the Trades Union Congress has said, which would give working families “long-term financial security” and reverse the “destructive trend” of wage stagnation.

Research has found that increasing the minimum wage to £15 per hour would disproportionately benefit workers in the North of England, while potentially increasing tax revenue by more than £30 billion.

The government has previously rejected calls for an increase on this scale, despite Boris Johnson and Rishi Sunak both pledging to transition to a ‘high-wage’ economy on numerous occasions.

This comes after it was revealed that average pay among CEOs at the UK’s top firms increased by 39% from 2020 to 2021, to more than £3.2m.

14 million would benefit from minimum wage hike

The TUC is urging an increase in the minimum wage to £15 per hour over the next few years, alongside a wider set of reforms which would put the UK on a path to a ‘high wage’ economy.

This would go some way toward redressing wage stagnation which has held back earnings for the average worker in recent years.

From 1970 until 2007 real wages grew by an average of 33% per cent a decade before, though this fell below zero in the 2010s, analysis by the TUC found.

As a result, UK workers are earning £88 a month less in real terms than in 2008.

A report by the Progressive Economic Forum (PEF) think tank earlier this year found that 14 million people would see an increase in their pay were the minimum wage to rise to £15 per hour.

According to its report, the majority of those to benefit from the scheme would be in the North of England, at 51%, compared with 33% in London.

PEF proposed implementing the increase over two years to 2024, and said increased tax revenues from the change could be used to support smaller businesses during the transition.

Labour MPs Zarah Sultana, Nadia Whittome and Clive Lewis were among those to express support for PEF’s proposals.

Whittome said the increase “has the potential to lift millions out of poverty,” while Lewis  described a new £15 minimum wage floor as “urgently needed”.

The TUC has put forward a “highly cautious estimate” for how the minimum wage could increase to this level by 2030, though it has urged the government to implement the increase “as soon as possible”.

It is also calling for stronger rights for workers to use collective bargaining to establish better pay deals, particularly in those sectors where low pay and poor conditions are currently widespread.

The TUC has also stressed that a new ‘national lifelong learning and skills strategy,’ including a right to paid time off for learning and training for all workers, would help to deliver a higher-skilled and higher-paid economy.

This would require a “significant boost” in investment by both government and employers, but would see returns through improved productivity.

TUC General Secretary Frances O’Grady said that all workers should be able to afford a decent standard of living, but that “millions of low-paid workers live wage packet to wage packet”.

“We can’t keep lurching from crisis to crisis,” she said. “Working families need long-term financial security – that means reversing the destructive trend of standstill wages.

“Ministers should introduce fair pay agreements to get pay and productivity rising in low-paid sectors.”

Top CEOs earning up to £17m per year

Research published this week by the TUC and the High Pay Centre found that CEOs of FTSE 100 companies saw their pay increase from £2.5m in 2020 to £3.4m in 2021, with median pay among CEOs now 109 times higher than the average full-time worker.

The highest paid FTSE 100 CEOs were Sebastein De Montessus of metals and mining firm Endeavour, Pascal Soriot of Pharmaceuticals giant Astra Zeneca and construction boss Albert Manifold of CRH.

They earned £16.9m, £13.9m and £11.7m respectively, while Frederic Vecchioli, the highest paid CEO of a FTSE 250 company, actually earned more than each of them, at £17m.

High Pay Centre Director, Luke Hildyard said: “Very high executive pay is a big part of the cost of living problem. If large employers are paying millions more to already very wealthy executives, that makes it harder to fund pay increases for low and middle-income workers.

“If incomes in the UK were shared more evenly, that would significantly raise the living standards of the people hit hardest by the current economic crisis, while those at the top probably wouldn’t notice much difference to their lifestyles.”