Research confirms raising the minimum wage does not cost jobs

The research will be seized upon by living wage campaigners

A report by the National Institute of Economic and Social Research has found that raising the minimum wage does not not lead to a fall in employment levels.

In April 2016, the government increased the minimum wage for over-25s by 7.5% to £7.20 an hour. The report said this did not lead to unemployment. One of its authors said:

“We find no robust effect on general employment retention or hours worked, despite finding, as expected, significant wage growth for the lowest paid.”

“Overall we find that the [raising of the minimum wage] has increased wages for the low paid with generally little adverse effect on employment retention.

“However, consistent with previous research, we do find some evidence of adverse effects on the employment retention rates of women working part-time.”

The government labelled the new minimum wage increase, the ‘national living wage’. However, according to the Living Wage foundation, it is far below the actual living wage – the amount needed to live off.

The government’s ‘national living wage’ is £7.83 while the Living Wage Foundation’s living wage is £9 outside of London and £10.55 in London. For 21 to 25 year olds, the minimum wage is £7.38

At the 2017 election, the Labour Party and Green Party of England and Wale pledged to increase the minimum wage to £10 an hour for everyone over 18 by 2020.

The Liberal Democrats wanted an independent review, the SNP wanted devolution of the minimum wage and Plaid Cymru promised to fight for a real living wage.

The minimum wage was introduced by the Labour government in 1998. At the time, the Conservatives opposed its introduction saying it would take Britain back to the 1960’s.

Joe Lo is a reporter for Left Foot Forward

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