The UK’s national living wage is set to increase from April onwards, with Chancellor Jeremy Hunt expected to make the confirmation on Monday. The increase would see the minimum wage for workers aged 23 or over rise from £10.42 to at least £11 an hour. This change is set to boost earnings for approximately two million people.
While the UK national minimum wage is the same across the country, it varies by age. The rates currently stand at £10.42 an hour for those over 23, £10.18 for those aged 21-22, £7.49 for 18 to 20-year-olds, £5.28 for under-18s and the apprentice rate. Officials from the Conservative party predict that the rise in wages will increase the annual earnings for a full-time worker on the national living wage by £1,000 next year.
The Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA) has warned that without supporting measures for businesses, the rise in minimum wages could lead to results opposite to those intended. The RSA believes that many employers may be forced to resort to staff cuts and fewer hours of work, leading to major changes for those on low pay. They have urged government officials to consider alternative supportive policies to prevent job losses among those for whom the hike in minimum wage is intended.
The national minimum wage was passed into law in 1998 by the Labour government, with an initial rate of £3.60 for those 22 and above and £3.00 for 18-21 year olds. The minimum wage increase was originally set up with an intention to reduce employment disputes and the gap between high and low earners. Despite initial concerns that minimum-wage increases may harm employment, no evidence emerged to back up these concerns. The number of Living Wage-accredited employers has more than doubled to 12,500 in the past two years, including Aviva, Ikea, Nationwide, and Burberry
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