Independent review backs Chancellor pledge for higher National Living Wage
The government has published the independent Dube Review into minimum wages.
The independent review into the evidence on minimum wages by leading expert Professor Arindrajit Dube has concluded a more ambitious National Living Wage (NLW) is the right approach, following the Chancellor’s pledge to increase the NLW further.
The review, published Monday 4 November, concludes minimum wages in a range of countries have had a negligible or zero effect on jobs, but significantly increased the earnings of the lowest paid. The Chancellor has pledged a more ambitious NLW so that on current projections it is set to reach £10.50 per hour by 2024, as part of his commitment to do more to end low pay.
Chancellor of the Exchequer, Sajid Javid, yesterday said:
The evidence is clear that our approach is the right one.
We will end low pay by putting the National Living Wage on a path to increase to £10.50 over the next five years.
I thank Professor Dube for his important work and recommendations.
Professor Arindrajit Dube yesterday said:
Based on the overall evidence—with a special emphasis on the recent, high quality, evaluations of the National Living Wage and other more ambitious policies internationally — my report concludes that that there is room for exploring a higher NLW in the UK up to two-thirds of the median wage.
It will also be important to empirically evaluate and recalibrate any such ambitious policy based on new evidence down the road.
The report, ‘Impacts of minimum wages: review of the international evidence’, examines the international evidence from Germany, the US and other countries on the impacts of minimum wages, as well as recent research on the impact of the NLW in the UK.
Professor Dube, from the University of Massachusetts Amherst, National Bureau of Economic Research and IZA Institute of Labor Economics, was commissioned by the government to review minimum wage policies in Spring 2019. As part of his work, Professor Dube consulted with the Low Pay Commission, academics and policy experts in collating his evidence and developing his findings.
The previous NLW target was to reach 60% of median earnings by 2020. In line with the conclusions of the Dube Review, the Chancellor Sajid Javid has pledged to increase the NLW towards a new target of two-thirds of median earnings by 2024, provided economic conditions allow. The Chancellor additionally committed to expand the living wage to more young people by bringing down the age threshold for the NLW to cover all workers over the age of 21.
The government will respond fully to the review in due course.
The NLW increased by 4.9% on 1 April 2019 to £8.21. This means a full-time minimum wage worker’s annual pay has risen by over £2,750 since its introduction.
The proportion of low paid jobs is at its lowest since records began in 1997.
Latest News from
£56 million to boost business productivity05/11/2019 12:45:00
Businesses around the country are set to benefit from government-backed funding schemes to boost productivity.
Net Zero Review launched to support UK's world leading climate commitment04/11/2019 15:20:00
The Chancellor recently (2 November 2019) launched a review that will determine how the UK ends its contribution to global warming.
Infrastructure revolution to unlock thousands of new homes01/11/2019 12:25:00
The Chancellor has announced more than £250m in funding from the Housing Infrastructure Fund to ensure over 20,000 new homes nationwide have access to the vital infrastructure they need.
Changes to The Crown Estate Board31/10/2019 15:20:00
The Crown Estate has announced one new appointment and one re-appointment to their board.
The UK Financial Services Beyond Brexit Summit: Economic Secretary's speech28/10/2019 16:47:00
The Economic Secretary to the Treasury and City Minister, John Glen, delivered a speech to financial sector leaders at the fifth UK Financial Services Beyond Brexit Summit.
£1 billion deal set to solve poor mobile coverage25/10/2019 15:22:00
Poor mobile phone coverage will be a thing of the past as the Government champions a £1 billion deal with the mobile phone industry to banish rural not-spots.
17 banks and lenders confirm support for SME customers through Brexit and beyond24/10/2019 12:12:00
Banks and alternative lenders have reaffirmed their pledge to support small and medium sized businesses (SMEs) with concrete commitments under the new SME Finance Charter.
Chancellor marks beginning of decade of renewal for UK economy17/10/2019 15:15:00
The Chancellor Sajid Javid will mark the beginning of a decade of renewal for the UK economy at his first IMF annual meeting.