WEDNESDAY 4 MARCH 2020Rise in minimum wage ‘did not
result in jobs being cut’
JON STONE
POLITICAL CORRESPONDENT
The rise in minimum wage has not resulted in job cuts or higher prices for consumers, research by the
government’s low-pay watchdog has found.
The Low Pay Commission found that employers tended to absorb higher costs from the increase in the pay
floor “through a reduction in profits” and that inflation data “does not reveal significant effects” on prices.
The government has increased the minimum wage sharply since April 2016, raising it from £6.70 to £8.21
today. It is set to reach £8.72 in April, meeting the target of 60 per cent of median earnings for the first
time.
Despite official forecasts at the policy’s announcement that it could lead to a reduction in jobs, the
Commission said evidence over the last few years showed there had been “no such effect”.
“We pay close attention to the evidence on the national living wage’s impact on jobs,” the Commission said
in its annual report published at the start of 2020.
“In 2015, when the rate was announced, the Office for Budget Responsibility forecast it could lead to
20,000-110,000 fewer jobs than without the NLW by 2020.
“This was in the context of a forecast increase in employment of around 1.4 million between 2014 and 2020
- which has turned out to be an underestimate, with 2.1 million jobs created since.
“Our research on employment effects suggests the initial introduction of the NLW had an effect on the
employment retention of female part-time workers. However, the evidence indicates subsequent up-ratings
have had no such effect.”
Rises were announced by former chancellor
George Osborne (PA)