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Welfare Reform on the Web (November 2010): Minimum Wage - UK

Global financial crisis and the UK national minimum wage: looking back to understand the present

V. Mackay

Policy Studies, vol. 31, 2010, p. 559-576

This article argues that current UK minimum wage enforcement can derive positive lessons of practical significance from an historical and comparative analysis of the 1945 Wages Councils Act, repealed in 1993 by the Conservative government. It identifies problem areas of current minimum wage enforcement as: primary reliance on the individual worker to make a complaint; lack of trade union support and involvement; underresourced compliance teams and some confusion as to their role; poor knowledge of the extent of non-compliance; and weak prosecution policy. The positive elements of the Wages Councils Act from which current policy could learn were: gathering regular statistics, in-depth industry knowledge and an integral trade union presence. The negative elements were: persistent unwillingness to resource the inspectorate or to prosecute; legal penalties which did not deter; and, on occasion, gross political interference.

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