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National Living Wage is no joke

Editorial Team, 30 Mar 2016


It’s not an April fool – on 1 April 2016 millions of workers over 25 will see their minimum pay rate rise from £6.70 to £7.20 under the new National Living Wage (NLW). Who are the winners and the losers?

Think tank, the Resolution Foundation, said that in some parts of the UK as much as a third of the workforce will get more money, whereas workers elsewhere will see little difference to their pay. The NLW will mean an increase from £6.70 to £7.20 for millions, yet those under the age of 25 will continue to receive the National Minimum Wage. Hotspots include Sheffield, where 22% of workers can expect an increase, but parts of London and the South East are unlikely to benefit, with just 3% of employees in the City of London benefiting. The groups that will benefit most are women, those between 25 and 30, and people still working over the age of 66.

Of course, there is a cost to this wage increase which lies at the door of employers, and several large companies have said it will hit their profits significantly as well as reducing hours worked by four million a week. As a result, thousands of workers could lose their jobs (according to the Office for Budget Responsibility) or be given shorter hours.

Despite the obvious cost to employers, some companies, such as IKEA, are actually going above and beyond by introducing an increase to £8.25 and hour and £9.40 in London, which is the Living Wage Foundation’s voluntary living wage rate.

What do you make of the NLW?


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