It's time to get tough on non-payment of the minimum wage

At least 300,000 workers in the UK still do not receive the legal minimum. The current compliance system is in desperate need of reform.

The national minimum wage, now 15 years old, is one of the most significant institutional innovations in Britain’s political economy. It has established a baseline for earning that no worker should fall below. Yet according to a new report, Settle for nothing less, out today from the Centre for London, at least 300,000 workers in the UK still do not receive the bare minimum to which they are entitled. This is not good enough in 21st century Britain: no one here should have to work for less than the legal minimum.

Compliance with the minimum wage is enforced nationally by HMRC on the government’s behalf. This arrangement costs about £8m per year but only identifies roughly £4m of arrears owed to short-changed workers. As well as securing the return of these arrears, it imposes fines on non-compliant employers and, on rare occasions, pursues them further in the courts.

In too many parts of the workforce, though, this system is not working. Thousands of home carers, doing some of the most important work in our society, are not getting paid for their travel time between clients. Apprenticeships are part of the answer for the million young people in our country now out of work, but their abuse in sectors such as hairdressing is endemic. Internships too often amount to proper work yet remain unpaid. Migrant workers are particularly vulnerable to exploitation, especially when their employer also provides the roof over their heads. General awareness of basic entitlements is low and the current regime of sanctions for non-compliance is weak. Moreover, workers who are being exploited are unlikely to pick up the phone to report their employers to a remote and distant Pay and Work Rights Helpline.

It does not have to be this way. Today’s report argues for change to address systemic challenges to minimum wage compliance, specific concerns about migration, low levels of awareness and negligible sanctions, and an institutional framework for the delivery of minimum wage enforcement that can be improved. 

The report’s recommendations include:

  • building a schedule that requires minimum wage payment into local authorities’ home care contracts;
  • abolishing the first-year apprentice rate of the minimum wage;
  • banning the advertising of unpaid internships;
  • removing the cap on fines for employers flouting the minimum wage;
  • prosecuting repeat offenders;
  • and naming every employer found to be in breach.

But the single best thing we could do to increase compliance with the minimum wage is to devolve primary responsibility for its enforcement to the local level.

Local authorities are much closer to the ground than HMRC could ever be. They already do enforcement work with local employers when it comes to trading standards, waste, health and safety, planning, licensing and more. The businesses that ignore these regulations are often the same businesses that flout the minimum wage. Local authorities know the employers in their patch – both the bad ones that may need investigating and the good ones who have a vested interest in leveling the playing field.

The current system for minimum wage enforcement is excessively centralised and exploited workers suffer as a result. From hotel cleaners paid unfair rates per room rather than per hour to migrant domestic workers treated as modern slaves, localised enforcement of the minimum wage would heighten the prospect of their unscrupulous employers getting caught.  

Empowering local authorities to enforce the minimum wage would help us ensure that it is worth the paper it is written on. After all, it is supposed to be a right, not a perk.

Andy Hull is a Research Associate at the Centre for London.

A restaurant worker protests against employers who pay less than the minimum wage outside Pizza Express on September 27, 2007. Photograph: Getty Images.
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Donald Trump ushers in a new era of kakistocracy: government by the worst people

Trump will lead the whitest, most male cabinet in memory – a bizarre melange of the unqualified and the unhinged.

“What fills me with doubt and dismay is the degradation of the moral tone,” wrote the American poet James Russell Lowell in 1876, in a letter to his fellow poet Joel Benton. “Is it or is it not a result of democracy? Is ours a ‘government of the people by the people for the people’, or a kakistocracy rather, for the benefit of knaves at the cost of fools?”

Is there a better, more apt description of the incoming Trump administration than “kakistocracy”, which translates from the Greek literally as government by the worst people? The new US president, as Barack Obama remarked on the campaign trail, is “uniquely unqualified” to be commander-in-chief. There is no historical analogy for a President Trump. He combines in a single person some of the worst qualities of some of the worst US presidents: the Donald makes Nixon look honest, Clinton look chaste, Bush look smart.

Trump began his tenure as president-elect in November by agreeing to pay out $25m to settle fraud claims brought against the now defunct Trump University by dozens of former students; he began the new year being deposed as part of his lawsuit against a celebrity chef. On 10 January, the Federal Election Commission sent the Trump campaign a 250-page letter outlining a series of potentially illegal campaign contributions. A day later, the head of the non-partisan US Office of Government Ethics slammed Trump’s plan to step back from running his businesses as “meaningless from a conflict-of-interest perspective”.

It cannot be repeated often enough: none of this is normal. There is no precedent for such behaviour, and while kakistocracy may be a term unfamiliar to most of us, this is what it looks like. Forget 1876: be prepared for four years of epic misgovernance and brazen corruption. Despite claiming in his convention speech, “I alone can fix it,” the former reality TV star won’t be governing on his own. He will be in charge of the richest, whitest, most male cabinet in living memory; a bizarre melange of the unqualified and the unhinged.

There has been much discussion about the lack of experience of many of Trump’s appointees (think of the incoming secretary of state, Rex Tillerson, who has no background in diplomacy or foreign affairs) and their alleged bigotry (the Alabama senator Jeff Sessions, denied a role as a federal judge in the 1980s following claims of racial discrimination, is on course to be confirmed as attorney general). Yet what should equally worry the average American is that Trump has picked people who, in the words of the historian Meg Jacobs, “are downright hostile to the mission of the agency they are appointed to run”. With their new Republican president’s blessing, they want to roll back support for the poorest, most vulnerable members of society and don’t give a damn how much damage they do in the process.

Take Scott Pruitt, the Oklahoma attorney general selected to head the Environmental Protection Agency (EPA). Pruitt describes himself on his LinkedIn page as “a leading advocate against the EPA’s activist agenda” and has claimed that the debate over climate change is “far from settled”.

The former neurosurgeon Ben Carson is Trump’s pick for housing and urban development, a department with a $49bn budget that helps low-income families own homes and pay the rent. Carson has no background in housing policy, is an anti-welfare ideologue and ruled himself out of a cabinet job shortly after the election. “Dr Carson feels he has no government experience,” his spokesman said at the time. “He’s never run a federal agency. The last thing he would want to do was take a position that could cripple the presidency.”

The fast-food mogul Andrew Puzder, who was tapped to run the department of labour, doesn’t like . . . well . . . labour. He prefers robots, telling Business Insider in March 2016: “They’re always polite . . . They never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex or race discrimination case.”

The billionaire Republican donor Betsy DeVos, nominated to run the department of education, did not attend state school and neither did any of her four children. She has never been a teacher, has no background in education and is a champion of school vouchers and privatisation. To quote the education historian Diane Ravitch: “If confirmed, DeVos will be the first education secretary who is actively hostile to public education.”

The former Texas governor Rick Perry, nominated for the role of energy secretary by Trump, promised to abolish the department that he has been asked to run while trying to secure his party’s presidential nomination in 2011. Compare and contrast Perry, who has an undergraduate degree in animal science but failed a chemistry course in college, with his two predecessors under President Obama: Dr Ernest Moniz, the former head of MIT’s physics department, and Dr Steven Chu, a Nobel Prize-winning physicist from Berkeley. In many ways, Perry, who spent the latter half of 2016 as a contestant on Dancing with the Stars, is the ultimate kakistocratic appointment.

“Do Trump’s cabinet picks want to run the government – or dismantle it?” asked a headline in the Chicago Tribune in December. That’s one rather polite way of putting it. Another would be to note, as the Online Etymology Dictionary does, that kakistocracy comes from kakistos, the Greek word for “worst”, which is a superlative of kakos, or “bad”, which “is related to the general Indo-European word for ‘defecate’”.

Mehdi Hasan has rejoined the New Statesman as a contributing editor and will write a fortnightly column on US politics

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

This article first appeared in the 19 January 2016 issue of the New Statesman, The Trump era