National Living Wage Review published
National Living Wage Review published
Posted on 19 May 2022
The
Low Pay Commission has now published its review of the National Living Wage from 2015-2020. You can read the review as well as its headline findings online here.
The announcement of the National Living Wage in 2015 heralded a new era for minimum wages in the UK. The policy aimed to increase pay and productivity without harming jobs, while also reducing spend on benefits. This review collects the evidence on the NLW’s achievements from 2016 up to April 2020, when the National Living Wage reached the Government’s initial target of 60 per cent of median earnings.
The review finds that while the NLW increased wages and did not reduce employment, the increase in earnings did not lead to higher incomes and did not measurably improve productivity. Nevertheless, the growth in earnings helped reduce regional pay inequality and contributed to shrinking gender and ethnicity pay gaps. After the introduction of the NLW, minimum wage workers were less likely to move employers but continued to progress into higher-paid roles at the same rate as previously.
Alongside the review, they have also published a more detailed paper on the impact of NLW on productivity which you can also access here.