THE minimum wage has been one of the most successful government policy initiatives of recent decades, but it has done little to tackle in-work poverty, according to the Carnegie UK Trust.

In the last of a series of reports, the Trust has set out a path for the future of the policy, with a series of recommendations on how it can be improved. It said the minimum wage has helped to significantly reduce extreme low pay and, more recently, the increase in the wage floor through the National Living Wage (NLW) has helped reduce low pay – with “little if any negative impact on employment”.

However, the Trust added: “While it has been successful in tackling low pay, the minimum wage has done little to tackle in-work poverty, which has grown over the last decade driven both by rising cost of living and cuts in social security support.”

It said the UK Government had set a “bold” target to increase the NLW to two thirds of median hourly pay by 2024, which could boost pay for many at the “bottom end of the income distribution”, but the coronavirus crisis had made this more challenging.

Carnegie said the Government should maintain this commitment and be guided by the Low Pay Commission recommendations.

Employers should be supported to adapt to a “higher wage floor” to help minimise job losses, said the Trust, adding: “This should include a temporary reduction or rebalancing of employer National Insurance Contributions, focused on low paid workers, as well as targeted support to sectors with a higher proportion of low paid workers.”

Carnegie said the NLW should be extended to cover workers aged 21 and over, with a higher “Youth Minimum Wage” for younger workers.

It said the Government should use the upcoming Employment Bill to tackle underpayment of the minimum wage, which should include a well-resourced “know your rights” campaign for workers and a “know your responsibilities” campaign for employers.

This should be accompanied by stronger sanctions against employers who undercut the legal minimum, along with more robust enforcement of the policy.

Douglas White, head of advocacy for the Carnegie UK Trust, said: “Pay is a fundamental component of good work, with the idea that work should allow us to provide for ourselves and our families core to our social contract. However, we must also recognise that work that is, for example, unsafe, insecure or lacking opportunities to progress or express your views has a negative impact on wellbeing for individuals, communities and society.

“Tackling these challenges requires further action in conjunction with the vital task of raising the minimum wage.”