Business Secretary Vince Cable is pressing for an increase in the minimum wage amid concerns that many lower-paid workers are still not benefiting from the burgeoning economic recovery.
Speaking before the Liberal Democrat party conference in Glasgow today, Mr Cable said he would ask the Low Pay Commission to restore its value, which he estimates has fallen in real terms by 10% to 12% since the crash of 2008.
"We cannot go on forever in a low pay and low productivity world in which all we can say to workers is, 'You have got to take a wage cut to keep your job'," he told told The Guardian.
Mr Cable said action to boost low pay should be combined with measures to tackle the abuses of zero-hours contracts.
"We have got to enter into a different kind of workplace. For a very long time, five or six years, wages have been suppressed in low wage sectors. I am sending a signal that we are entering a very different environment," he said.
In a further sign that cost of living issues are set to dominate the annual party conference season, his Lib Dem colleague - Treasury Chief Secretary Danny Alexander - urged employers to ensure that staff benefited in their pay packets as profits picked up again.
"It's not for me as a Treasury minister to start telling employers what their pay policies should be, that's a matter for firms," he told The Daily Telegraph.
"But of course, as growth returns to our economy and we see businesses being successful, the workforce will want to and should share in that success."
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