Labour Market

NMW increase will hit the most vulnerable the hardest


Government and Institutions

New IEA research calls for urgent action to prevent state-funded political activism

Government and Institutions

IEA releases its recommendations for the 2014 Budget

For people out of work, the real minimum wage is zero

Commenting on the Low Pay Commission’s recommendation of a 3% rise in the minimum wage to £6.50 from October, Mark Littlewood, Director General at the Institute of Economic Affairs, said:

“This increase will have a negative effect on the people it is meant to help: the young and low-skilled. For people out of work, the real minimum wage is zero.

“The national minimum wage has grown faster than average earnings since 2007 and today’s recommended 3% increase comes at a time when average wages are still growing slowly. Legislated pay hikes such as this are likely to privilege those in work whilst worsening the job prospects for the most vulnerable.

“Whilst the LPC claims to take into consideration the potential effects on employment and firms’ ability to pay, many politicians unfortunately still seem to advocate even higher minimum wages and even more intervention. Policymakers should be focusing on tackling rising living costs to benefit everyone, rather than imposing further cost burdens on business and barriers to work.”

Notes to editors:

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