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Expert hails minimum wage success

Britain's national minimum wage (NMW) is one of Labour's "crowning achievements", an employment expert has said.David Coats, associate director of the not-for-profit Work Association organisation, argues in a report published today that the redistributive effects of the NMW have helped reduce income inequality to levels not seen for two decades.He argues that the real-term surge in the NMW from 2003 has helped lower-income households significantly, with women working part-time the chief beneficiaries.However, he argues that the NMW should not be raised beyond its current level when the government announces its 2007 increase, expected shortly."The time has come for a period of consolidation in the real value of the wage," Mr Coats argues."To preserve the precious coalition of social partners on which the success of the NMW has been built, a relatively cautious rate rise for 2007 should be recommended."He suggested a rise from the present hourly rate of £5.35 for adults to around £5.60, rejecting the idea that the NMW be raised to a "living wage" of around £7.00.Meanwhile the entrenchment of youth rates, in two brackets for those aged 16-17 and those aged 18-22, also met with the report's approval."It is far better then to have the highest possible adult rate and recognise the powerful case for treating young workers differently," Mr Coats wrote.The new NMW rate will be introduced from October this year.

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