An hourly rate of between '6 and '7 was needed, rather than the present '4.85, if workers are to escape poverty on the basis of their earnings, said the New Policy Institute.
The report claimed there were up to seven million low-paid workers in the UK, including four million women.
The largest sector for low pay was retail and wholesale, although one in four were in public sector jobs, including the NHS, education and social work, said the institute.
The Government was urged to launch a "new deal for the low-paid" with the aim of making sure employers took responsibility for improving pay and conditions.
Catherine Howarth, the report's co-author, said: "The day to day experience of people in low-paid jobs in this country remains a struggle despite the minimum wage and tax credits.
"A new deal for the low-paid would make a real difference to the lives of millions of people."
TUC general secretary Brendan Barber said: "This timely pamphlet identifies a problem that demands new policies and approaches from Government, unions and employers.
"Low pay, low quality jobs and low productivity are all connected and demand a response that combines tax credits, the minimum wage, better employment rights and a positive role for the public sector." Tweet
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B#5 per hour equates to a gross annual salary of B#8800 which (after income tax and national insurance) leaves approximately B#670 a month (assuming a 37 hour week). So after rent (B#200), council tax (B#50), bills (B#50), food (B#100) and pension (B#50) that leaves B#220 per month disposable income for expenses such as travel, childcare, paying-off debts or socialising. That is adequate if one is frugal.
Raising the minimum wage reduces the number of jobs in the economy, benefiting the people who remain in work at the expense of those who are made redundant. This is because if workers are more expensive, on aggregate firms cannot afford to hire as many as before.
The minimum wage should not be increased to B#6 or B#7 per hour, but instead it should remain at its current level and rise in line with inflation every year therefore preserving the real value of pay over time.
Chris - Glad you pointed that out! These "think tanks" give absolutely no thought to the wider impact of their "recommendations". this sort of "research" is therefore completely worthless / pointless.
B#5 an hour isn't that bad.
I graduated with a sensible degree & have over 3 years experience in my field & only get paid B#7.50 phr.
B#5 isn't bad for those that left school with minimum GCSE's & are only doing simple jobs that don't require skills or qualifications.
When I was studying & before minimum wage I did cleaning for B#2.50 phr & worked in a shop for B#3.50phr.
For those ignorant people out there, HEALTH and WEALTH are linked, the better the income the healthier the lifestyle, people comment that all the 'the trouble causes' come from certain 'deprived estates'...not all are 'dolies'...many happen to be parents who work long hours to supplement their low incomes and are not able to dedicate as much time as possible to their families hence the social breakdown...a decent wage and better worklife balance will pay dividends for this country...but there are too many out there who can't 'see the wood for the trees'....one only has to compare the levels of antisocial behaviour here with that in other European nations...they have better social equality and therefore intergration, where are we?
Thanks to those that oppose a decent wage and shorter working week our country is in a 'fine mess'...again well done to the Laurel & Hardy's of this counrty!
I feel so privileged to live in a country with so many clever people! B#200 for rent??? Where exactly does Chris live? My daughter is currently paying over B#400 renting a property. She is a hardworking girl, but is suffering such stress because she is finding it so hard to make ends meet. Some weeks she has actually gone short of food. I do what I can to help, but it isn't easy as I need to think of my future and the pension I won't get because I stayed at home to look after my children. Now I am near retirement I am trying to save. How can I do that when the wages offered are disgusingly low? My daughter should be saving for her pension but can't afford to! I would like to see Chris live on the minimum wage! Les is so right. Health and the amount of money coming into a house go hand in hand! Wake up you patronising people!
Marie, I live in Manchester and also pay over B#400 per month rent. However, I know for a fact that decent accommodation can easily be found in the area for B#200 per month as I looked at many of these places whilst house hunting recently. You say your daughter sometimes goes short of food, but also that she is paying B#400 per month rent... maybe you need to look closer to home for these "clever people" before accusing others of being naC/ve. Consider how pathetic you sound complaining of poor wages and your poor daughter that can't afford to eat when millions of people across the globe are living on less than $1 per day and as a result are dying from starvation. You and daughter should stop wallowing in your false victim status and realise just how lucky you are.
Marie what is your job I'm curious with you saying your wage is low.
What does your daughter do?
I only earn minimum wage after studying for five years. I get stressed out too but this isn't to say that I believe minimum wage ought to be more.
My sister started work earning B#65 a week,now at 16 you earn B#112.50(37.5hour week).
On one of my summer holidays whilst studying I worked in a factory, over 18's got B#2.40 - B#2.80. Therefore the B#4.85 they get is good.
The problem of minimum wage is that now people aren't willing to work for mimimum wage. Well if I hadn't done all those years of study, I'd be happy on B#3 at 16 and certainly would be happy on B#4.85.
If minimum wage goes up, doesn't this have a knock on effect on everything else?
Think of all the small companies who would struggle to pay B#6.