• Posted 4th August 2015

Will the National Minimum Wage Raise Work?

According to the announcement made by the Chancellor, George Osborne, the national minimum wage in the UK will be increased to £6.70 per hour from October 2015 and £7.20 per hour from April 2016 for workers aged 25 and over. This means this change will not have any affect under the age of 25. And, by 2020, the national minimum wage is set to be £9 per hour. The current national minimum wage is £6.50 per hour for over 21s. Likewise, the minimum wage for 18 to 20-year-olds will go up from £5.13 to £5.30 from October, and from £3.79 to £3.87 for 16 and 17-year-olds. The wage will increase to £3.30 per hour for apprentices. To hold up this new minimum wage plan, the Chancellor has made adjustments to corporation tax and employment allowances. However, the Chancellor’s announcement has received tons of backlashes from businesses, especially from retail, social care and hospitality sector. Such businesses have warned that they might not be able to pay such wage and cut jobs. If jobs will be cut, then around 60,000 people are predicted to lose their jobs. As a result, working families with children will be suffering the most. Apart from this pitfall, around six million people are set to be benefited from the changes in the minimum wage. At those currently on minimum wages, they will get an increase of 70p per hour based on the current rate. The sole purpose of this minimum wage rise is to improve the economy of the people as most of them are under the minimum pay. Although the Chancellor’s higher minimum wage is a welcome move for low-paid workers, we have to wait and watch whether his ambitions will be achieved or not. Stay tuned for further information on these issue in our future posts.