The NLW, which requires employers to pay employees over the age of 25 at least £7.20 an hour, was estimated by the Office for Budget Responsibility to equate 60,000 job losses by 2020.This is not the case, according to a Resolution Foundation report written by Conor D’Arcy, who said: “There’s little evidence so far to back up those fears. However, the precise details of the business response matter deeply – not least in determining how seriously we should take claims of any trade-off between pay and jobs. While much of the evidence surrounding the National Minimum Wage indicates that it has had little if any negative employment effect, the NLW marks a very significant lifting of the wage floor. “The decision to tie it directly to the median wage rather than following the recommendation of the Low Pay Commission on what the market can bear has provoked some concern that this time will be different. Simply put, the view that ‘if we put up the cost of employment, we will find fewer people employed’ continues to have traction among policymakers and others.” Read more articles related to the NLW:
- How can SMEs offset the cost of the NLW?
- Four ways to navigate living wage and auto enrolment changes
- If you can’t take the NLW heat, get out of the business
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