Nov 30, 2016 05:50 AM EST

LPC Reveals That National Living Wage Hike Had 'No Clear Evidence' Of Adverse Effects On UK Employment

By JC Santos

UK's Low Pay Commission found "no clear evidence" that the UK's April National Living Wage increase had any negative effects in employment or work hours in the United Kingdom. The LPC claims that the maintenance and retail sectors -- direly affected by the higher wages -- saw an increase in employment numbers. The Organization for Economic Co-operation and Development warns the UK government to proceed with caution upon increasing the National Living Wage.

By 2017, the minimum wage would increase by 4% to £7.50 ($9.30) an hour for all minimum wage earners in the United Kingdom. According to CNN Money, UK Chancellor Philip Hammond will outline the spending priorities on employment for the following year. 

Despite the mentioned increase of 4%, Chancellor Philip Hammond's "Autumn Statement" fail to make clear that the minimum wage could be lower than £7.60 ($9.90) based on estimates -- an amount former Chancellor George Osborne estimated in his Budget before leaving office for this year. The Office for Budget Responsibility said the UK's minimum wage should increase to £7.60 hourly by 2017 to meet the target £9 ($11.23) minimum wage in the United Kingdom by 2020.

According to, the Low Pay Commission warned that employers could unfairly reduce staff wages in other areas such as perks, bonuses or commissions to meet the standard employment time -- avoiding any adjustment for higher levels of overtime or special weekend working rates. About 1.3% of UK employees are paid less than minimum wage forcing the government to spend about £4.3 million ($5.3 million) a year to find employers paying unfair amounts to employees.

A survey revealed that CBI's employers have looked into price hikes, recruitment freezes and an apprenticeship levy -- pay your employer for experience -- to offset the higher labor costs. Clearly, recruitment freezes did not come to pass with the higher numbers of employed. Employers may likely have used price hikes and possibly unfair perk and commission reductions -- a hypothesis yet to be proven.

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