Minimum Wage in UK – National Living Wage (NLW) at 60 per cent of median earnings by October 2020

This Monday, the 1st April, 2 million people working minimum-wage jobs will start the week with a pay rise. The National Living Wage (NLW), the rate that applies to 25+ year olds, will rise by 38p, from £7.83 to £8.21. We project that this will increase the number of people paid at the wage floor to 2.7 million workers. In this article we chart the increasing reach of the minimum wage, and its impact on hourly wages at the bottom since its introduction in 1999.

First, who are the minimum wage employees? In 2019, 1.7 million are women (62 per cent of the total), and 1.6 million are working part-time (60 per cent of the total). Of course, there is significant overlap here – women working part time comprised more than two-in-five (43 per cent) of all minimum-wage workers in 2019. Minimum wage workers are also predominantly in the private sector (2.4 million in 2019 – 87 per cent of the total) and in three sectors in particular. In 2019, hospitality, wholesale and retail, and health and social Care together contain 3three-in-five minimum wage workers (58 per cent of the total).

On Monday the NLW enters its fourth year. The NLW is rising in value so that by October 2020 it will be equal to 60 per cent of median earnings (for those aged 25+), whereas in April 2015 it was worth 52 per cent. These increases are serving to extend the reach of the wage floor. In 2020, in just five years, the NLW will have doubled the proportion of employees paid the minimum from 6 per cent (representing 1.5 million workers) to 12 per cent (3.3 million workers).

Chosen excerpts by Job Market Monitor. Read the whole story at The minimum wage: now the only question is ‘how high?’ – Resolution Foundation