Vince Cable, the business secretary, is to press for an increase in the minimum wage amid concerns that the economic recovery is failing to lift living standards for large parts of the workforce.

Cable is to ask the Low Pay Commission to restore its value, which he calculates has fallen in real terms by 10-12% since the crash of 2008.

In an interview with the Guardian on the eve of what is likely to be a difficult Liberal Democrat conference, he said: "We cannot go on for ever 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'."

The move, the subject of intense coalition discussion, is one of the first concrete signs of the government taking action on the living standards agenda likely to dominate the pre-election landscape as the economy starts to grow.

The measures to combat low pay will also involve steps to tackle the abuses of zero-hours contracts, Cable said. "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."

Cable said employers could be cushioned from the possible impact on their profits by a reduction in the cost of their national insurance contributions. "That would be a far better option for tax cuts than the Tories' marriage tax allowance." He also promised more aggressive protection of the estimated 2 million workers in the social care sector – 830,000 of whom carry out home visits – with estimates that up to 220,000 of all care workers may be paid less than the minimum wage.

He said it would be for the independent Low Pay Commission to set out the precise timetable and process to lift the value of the minimum wage, but he expected, with a new framework, the increases would occur over two to four years.

The national minimum wage, worth £6.19 an hour since last October, has increased by almost 72% since its introduction in 1999 – faster than average earnings and prices. But in real terms, due to inflation, it has declined, so that its value last October was similar in value to 2004.

On zero-hours contracts, Cable said his department's review, under way for six months, had identified obvious abuses", including workers being forced to sign exclusively with one firm a permanent zero-hours contract without employment rights. "There are undoubted abusers and I am determined to do something," he said.

It was also revealed that shoppers in England are to be charged 5p a time for plastic carrier bags in supermarkets and other large stores. The move, intended to discourage use of the environmentally damaging bags, will be announced by Nick Clegg.

It will bring England into line with the rest of the UK; charges are already in place in Wales and Northern Ireland and Scotland is set to follow suit next year. Lib Dem sources said the charge would come into effect in England in 2015, although it is not yet clear whether it will be before or after the scheduled May general election.

Cable warned in his interview that "the danger lights have been flashing for some time" that the economy may tip into a house price-fuelled boom. He proposes that the Treasury's Help to Buy mortgage guarantee scheme should only be implemented this winter in regions where the housing market remains depressed. He identified only Northern Ireland, parts of the north of England, and parts of the Midlands as safe candidates for a scheme he fears will fuel a house price boom.

He said: "The idea that you can grow an economy on the back of rising house prices is a very, very dangerous argument. The Germans and other countries that have successful economies will be utterly mystified that the British think about economic management in those terms."

He claimed that any economic growth between now and the next election would not be large enough to involve any changes in the public finances.

He said Britain was enjoying a burst of growth, but "getting carried away with short-term economic data is not, I think, wise. I think we have a seven-year deficit reduction programme that has to stay and we shouldn't be calculating that there are massive windfalls simply because you have got a burst of growth." He warned of a "disastrous consequence of a house price boom in the private rented sector", saying this in turn could have a big impact on the housing benefit bill.

Cable urged the Lib Dems to avoid a conference confrontation over economic policy, saying it should be possible for the leadership to embrace amendments calling for a more independent approach.

Specifically excluding the chancellor George Osborne from the criticism, he says there are some Conservative politicians who are prepared to take the risk of a pre-election boom. "There are people out there who are just thinking very short term, very opportunistically. That is not sensible."

He agrees with Osborne that the shadow chancellor, Ed Balls, has lost the argument on deficit reduction. At the same time, he disagrees with the chancellor by highlighting the extent to which the government has shifted course in the face of the lack of growth. He said: "When the economy wasn't growing in 2012, government revenue fell as it does, the deficit widened and we took the view that is good Keynesian policy and we allowed the deficit to rise."

Setting out the urgent need to end some insecurities in the labour market, he said: "There is an underlying problem that, because the economy has been weak as a country , we are now poorer and the bargaining power of workers has been undermined."

Cable said he was in a sense providing "forward guidance" to the Low Pay Commission to focus on boosting the value of the national minimum wage, and to be less focused on the potential impact on employment. He said: "I'm reluctant to set specific time deadlines for moving the national minimum wage up as we don't know about how fast the recovery is." He will also ask the Low Pay Commission to look at whether different rates could apply in different industries. Nearly half of all low paid workers are employed in just two sectors – retail and restaurants.

It is estimated that 4% of workers earn at about the minimum wage.

Cable also defended his plans to privatise the Royal Mail, saying it was "nothing to do with ideology" but about bringing in private capital.