Irrespective of the outcome of the elections, the cost of labor for companies is set to rise in Britain.
On Monday, as per an independent review on Britain’s minimum wages found that setting a floor on pay had a insignificant effect on job creation. As a result, Britain’s plans on raising the minimum wage to two-thirds of median earnings, thus taking it to $13.58 (10.50 pounds) an hour.
Irrespective of the outcome of the December 12 elections, companies in Britain has likely to see a rise in wage costs.
Finance Minister Sajid Javid had said in September, he would increase the National Living Wage (NLW) to the new target by 2024, provided economic conditions allowed, and expand its reach to all workers over the age of 21, down from 25 now.
The opposition Labour Party has said, it would raise the minimum wage to $12.93 (10 pounds) an hour, if it wins the elections.
An independent review commissioned by the government from economics professor Arindrajit Dube of the University of Massachusetts Amherst examined the impact of minimum wages in Germany, the United States, Britain and other countries.
“Based on the overall evidence – with a special emphasis on the recent, high quality, evaluations of the NLW and other more ambitious policies internationally – my report concludes that there is room for exploring a higher NLW in the UK up to two-thirds of the median wage,” said Dube. “It will also be important to empirically evaluate and recalibrate any such ambitious policy based on new evidence down the road.”
Javid said, “The evidence is clear that our approach is the right one.”
Labour countered Javid saying, his pledge “was an insult to our hard working people”.
“It’s a derisory offer which people will have to wait years for,” said Labour’s finance spokesman John McDonnell.
“Labour will immediately introduce a real living wage of 10 pounds an hour for everyone 16 and over, outstripping every publicity stunt figure the Tories invent.”