Britain’s minimum wage should be made to vary across the country, according to a commission looking into how to boost the UK economy.
The RSA City Growth Commission believe such a move would help boost the economy by providing more disposable income for those in areas where living costs are more expensive.
If wages were to be decided at a ‘metro’ level as is proposed in the commission’s Human Capitals: Driving UK metro growth through workforce investment report, wages in would vary to match regional economic conditions.
These areas would be similar in size to those covered by a local enterprise partnership and council’s could have the power under the recommendations to apply for such wage limits to be introduced.
Giving wages a regional context
Currently the minimum wage is £6.31 per hour and the new ‘Metro Minimum Wage’ would be between that figure and the ‘living wage’ of £7.65 per hour (although this rises to £8.80 in London).
This should encourage people into work and will also help those who are struggling to make ends meet in difficult economic times following the recession.
“How can someone in Whitehall have the knowledge as to what is required for one region of the country compared to those locally responsible?” said commission chairman Jim O’Neill.
“We believe they don’t, and while we reserve our major recommendations until our final report in October, this specific report gives a strong flavour of the ideas we have developed from listening to experts in research as well as local businesses and policymakers around the nation.”
The Joseph Rowntree Foundation have also voiced their support for the proposals, describing the minimum wage as “one of the key ways of fighting poverty”.
Any potential changes under the system would enable people in areas where living is more expensive to earn higher hourly rates.
This should ease pressures on finances although other options are also available should people wish to consider them.
Provided that they can be paid back within the relevant time frame, personal loans can help to cover costs of unforeseen expenses and living – but they should not be seen as a long term solution.