According to an independent review of the policy, the sharp rise in the UK minimum wage has helped reduce inequality, but has done nothing to increase the country’s sustainable low productivity.
Under a policy set by conservative Prime Minister George Osborne, the UK minimum wage will rise at twice the median hourly wage between 2015 and 2020, more than one-third of workers. Inflation, which raised wages directly or indirectly against, brought about a rise in wages long ago.
An independent low-wage committee said in a report released Wednesday that it raised average weekly wages without significantly damaging the potential for higher wages for jobs and workers. However, the increase in income did not lead to an increase in the household income of low-wage workers, as it was accompanied by a freeze to the level of profits and their tapering with the increase in income.
LPC Chair Brian Sanderson said, “Given that the headwinds that businesses and workers face alike are greater than at any point in their lives, the results of the review are” policy outcomes. ” And reminds me of that limit in a timely manner. ” Introduction of wages “.
British Prime Minister Rishi Sunak said the latest increase in the minimum wage (main wages in April) was one of the key steps the government took to mitigate the difficulties caused by the surge in inflation. It rose 6.6% to £ 9.50). .. Low-wage workers also got from the decision to slow down the rate at which work allowances are withdrawn when their income increases.
However, minimum wage workers are still struggling to reduce real wages. April inflation strike According to data released on Wednesday, 9%, the highest level in over 40 years. According to an analysis by the Institute for Fiscal Studies, the poorest households, who spend most of their budget on food and energy, are already experiencing double-digit inflation.
Meanwhile, Sunak has so far resisted demands for a more generous profit hike than the 3.1% hike that took place in April, arguing that awkward government IT systems make it difficult to respond quickly. I am.
According to an LPC review, raising the minimum wage has helped reduce gender and ethnic wage gaps and reduce regional inequality. However, this policy seems to have failed to encourage one of the original goals set by the minister, that employers, to move to a higher productivity model.
The LPC said the analysis did not show a positive impact on productivity in the industries and regions where low wages are most prevalent. This is because productivity required a costly investment. Small employers often said that they needed to reduce their investment in order to pay higher wages. A significant minority has asked staff to work at a faster pace by giving them more tasks and keeping them absent, but this enhancement of work is not consistent with productivity gains. It was.
LPC findings are in conflict with the government’s claim that employers will rapidly raise wages in areas such as hospitality and food processing due to post-brexit labor shortages, leading to a “high-skilled, high-productivity economy.” Will accelerate the transition.
The rise in the UK minimum wage helped reduce inequality, but did not increase productivity.
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