Today, two million will be better paid

THE FIRST national minimum wage in British history will be introduced today amid demands that it should be raised by more than 25 per cent.

It is now be illegal for any organisation to pay employees aged 22 and over less than pounds 3.60 an hour, but the country's biggest union and the Labour Party's largest single financial backer are calling for a minimum wage of pounds 5.

The Trade and Industry minister Ian McCartney described the law as a "massive step forward" for the low-paid. "It will be a real plus for two million people. Another plus is that so many employers support it". Mr McCartney knows that was not always the case. He was sacked on the spot from his job as a young chef at a hotel near Glasgow when he asked for an extra pounds 1 on his pounds 7.35-a-week wage.

Some unions are still unhappy, however. A motion tabled for the annual conference of Unison, the public service union with 1.4 million members, says the new statutory wage "makes a mockery" of the principle of a national minimum wage and that the rate would "perpetuate poverty". A proposition tabled by Unison's national executive insists the rate should be struck at half male median earnings, which it rounds up to pounds 5.

The union's executive also declares its opposition to "discriminatory" rates for young people. A rate of pounds 3 applies to those aged 18 to 21 and the law does not apply to under-18s.

Rodney Bickerstaffe, general secretary of Unison, said his organisation would be pressing ahead with a "Living Wage" rally in Newcastle on 10 April in protest at the pounds 3.60 floor. He said the law would not cure the "blight" of low pay.

The GMB general union pointed out that most employers were ignoring the differential pay rate for young people. Both McDonald's and Burger King, which have come under fire for allegedly exploiting youngsters, are paying the full adult rate to all employees.

The Labour Research Department has found few large firms that will be pay younger staff less. Forte, the hotel group, is an exception, paying pounds 3.30 for employees aged 18 to 21. Poundstretcher, the discount store, confirms that the under-22s will receive less than pounds 3.60, the department said.

Stuart Chilton, spokesperson for the GMB young members' section, welcomed McDonald's decision to disregard the lower minimum. He said the 60 pence an hour amounted to pounds 24 a week and was "vital" to the budgets of young staff. The Low Pay Commission, which had advised the Government on the rate, had been wrong to encourage "age discrimination".

Official figures show that more than two million workers are likely to have pay increases because of the new law, but many employers have uprated wage rates well ahead of today.

Pub chains, charities, cinemas and manufacturing firms are among employers that have increased pay to comply with the legislation, according to Income Data Services (IDS) in a report published yesterday.

The research group believes there is little evidence that the wage requirement will hit employment. Jobs in the service sector, seen as most vulnerable, continue to increase, with 100,000 new positions in hotels and restaurants in the past year, IDS reports.

The findings conflict with the results of research conducted by Business Strategies, which predict that the minimum wage would cost more than 10,000 jobs in the South-east over the next two to three years. The study asserts that where employers are not already paying the minimum wage, its implementation and "knock-on" effects would force firms to reduce profits or increase prices. Either option would eventually lead to the employment of fewer people.