Report Shows Minimum Wage Increase Has Not Hit Employment Levels.

Feb 5, 2019

The wage increase has benefited 5 million workers since April 2018 without increasing unemployment.

According to the Low Pay Commission’s 2018 Report, roughly 5 million workers above the age of 25 have benefited from the 4.4% wage increase implemented last April. Currently the National Minimum Wage stands at £7.83 per hour, and this will rise again April 2019 to £8.21.

With increased pressures on businesses adhering to the Real Living Wage (which represents a calculation by the Living Wage Foundation charity, based on what it believes people need to live in the UK), pay is rising much faster than previously, not only for those on the rate, but also for the bottom 20% of earners.

Currently, 1.6 million people, 1 million of which are women, are paid wages at or below the RLW, which is 6.5% of workers over the age of 25. This percentage hasn’t changed since 2016.

In response to the mandatory wage rise, employers informed the Low Pay Commission that they were able to pay the new wages by “accepting lower profits, increasing prices where possible, restructuring workforce and narrowing the gaps between pay bands”. Ultimately, they said there was a need to improve productivity in order to manage cost increases.

However, these difficulties faced by employers has not translated into an increase in unemployment. 

Mike Cherry, national chairman of the Federation of Small Businesses, said that most small businesses were already paying their workers above the required £7.83 an hour.

Bryan Sanderson, Low Pay Commission chair, said: “That five million workers received higher pay rises in April than they would have done without the NLW shows how significant an intervention it has been in the labour market.

“So far, the evidence suggests the NLW has been successful in raising pay without causing unemployment, but employers have had to adjust in various ways.”

ShopWorks are currently helping a number of businesses manage their complex time & attendance and staff scheduling requirements. This is enabling businesses to reduce rising staff costs by an average of 7%.

Specialising in Hospitality, Leisure and Retail makes ShopWorks the perfect partner to implement cloud-based Workforce Management software. 

Many of our customers have multiple pay rules for the same person, dependent on the job role they have been scheduled to complete. This combines with the simple drag-and-drop scheduling tool which reduces the time taken to complete rotas – an often lengthy and complicated task. 

For any more information on how the ShopWorks time and attendance system can improve the management of your staff, as well as reduce direct costs by an average of 7%, click below:


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