Wednesday, October 03, 2012

Why the minimum wage increase is wrong

As of the 1st October the minimum wage per hour increased, I have no problem with that what I do have a problem with is what they've raised it to.

From October last year the minimum hourly wages were £6.08, £4.98, £3.68,  and £2.60 for the various different age-groups etc. They've increased to £6.19, £4.98, £3.68, and £2.65 i.e. only two have really altered, the £6.19 and £2.65. So what do I find a problem?

Those are hourly rates, but at the minimum wage level 'hours' can be determined by the half or even quarter hour. Divide £6.19 and £2.65 by two or four. They don't divide into whole pennies. So someone who works shifts and work a week resulting in 10.25 hours should receive a minimum of £63.44 and ¾ of a penny so that should be rounded up to £63.45. Seems easy, but both of these figures are exactly one penny away from a number that divides evenly by both two and four. £6.20 becomes £3.10 or £1.55; £2.64 becomes £1.32 or £0.66.

This doesn't even make sense if they're increasing by a fixed percentage of 2% as £6.08 *1.02 = £6.2016. So someone seems to have specifically chosen these figures. It seems, big surprise, that the department calculating them have absolutely no idea how they're applied.