A higher minimum wage of £8 an hour would not lead to significant job losses in London
A higher minimum wage of £8 an hour would not lead to significant job losses in London, according to new research.
Despite claims that the chancellor’s new National Living Wage (NLW), starting from £7.20 an hour in 2016, will lead to job losses, research by the Centre for London found that from October 2015 a London-specific minimum wage could be set between £7.05 and £8 an hour.
Previous research by the organisation found that London could support a higher minimum wage that could progressively be increased to a long-term rate as much as 20 per cent higher than the national level without leading to job losses.
The latest research, which updated the think tank’s previous estimate, has concluded that from October 2015 a London-specific Minimum Wage could be set between £7.05 and £8 an hour.
But it has warned that the majority of the 60,000 job losses the Office of Budget Responsibility (OBR) has estimated will occur as a result of the NLW are likely to be outside London.
Earlier this month the director general of the Confederation of British Industry (CBI) John Cridland warned that increasing the minimum wage was a “gamble”:
“But wages can only grow as businesses grow. A £7.20 National Living Wage in 2016 and a £9 National Living Wage by 2020 are laudable objectives, but they are a gamble.”
Commenting on the analysis, Labour London Assembly economy spokesperson, Fiona Twycross AM said:
“The government’s ‘Living Wage’ is many miles away from what you actually need to live on in the capital. It’s a purely half-hearted gesture that risks condemning people to poverty by removing the incentive for businesses to pay a true London Living Wage.
“With the cost of Living in London so high, we’re in need a far more ambitious approach for the capital. Anything short of a true London Living Wage will undoubtedly leave thousands of low paid workers struggling to get by in the capital.”