The Trades Union Congress (TUC) has lashed out at the CBI for being stuck in a National Minimum Wage ‘Groundhog Day’; the condemnation comes ahead of the rate rise for workers over 22 years to £4.85 up from £4.50 this Friday (1 October).

The CBI have warned that businesses may not cope with further wage increases.

Union body, the TUC, however, say that jobs have gone up every time the minimum wage has increased.

The TUC say that evidence from Income Data Services shows that employment has grown in sectors of the economy where the minimum wage has had the most impact proving that there is still room to raise the wage above £5 in 2005.

The Low Pay Commission predict that 1.5 million workers will benefit from the rate rise while their official statistics show that in 2003 when the wage was increased from £4.10 to £4.20 for adult workers 1.3 million were better off.

Jobs have also increased since the National Minimum Wage was brought in, according to figures from the Office of National Statistics. In their spring quarterly review they say that employment was 24,458,000 in 2004 up from 23,058,000 in 1998.

Women look to be the main beneficiaries of the wage increase. In 2003 53% of female part-timers benefited opposed to 13% of male part-timers.

Brendan Barber TUC General Secretary said: “The minimum wage is doing the business. It helps around a million people every time it goes up, most of them part-time women workers, and jobs have been gained not lost.

“But the CBI seems to be stuck in a minimum wage ‘Groundhog Day’, every time it increases they cry wolf on job losses. It’s time they accepted that the wage works and instead concentrated on helping the Government and trade unions crack down on employers who are still not paying staff the legal minimum.’

In response Susan Anderson, CBI Director of Human Resources Policy, said:

“Nobody should be complacent about increases in the minimum wage. We cannot afford to go on forever giving people increases well above rises in average earnings.

“The fact is that more and more companies are starting to say that the wage is having an impact. We already know that many firms are worried about the next rise to £4.85.

“The wage is now on the radar for big businesses as well as small. Business will not oppose rises that can be justified. But the TUC and IDS are clearly jumping the gun by suggesting they know a figure above £5 will be okay.

“We cannot let wishful thinking colour our judgement.”