According to a new study published by the Resolution Foundation this week, the number of workers across the UK on minimum wage is expected to double over the next five years. The group’s findings were released in time to coincide with today’s 20p rise on the bottom line income and discovered that George Osborne’s decision to implement this so-called ‘national living wage’ would have a profound impact on the volume of employees having their wages set by the state.
Growth in the number of minimum wage workers
Following Tony Blair’s parliamentary reign in 1999, only one in 50 employees were receiving the minimum wage after the government set it at a cautionary low level but this number has risen to one in 20 over the past few years. This upward trend is predicted to continue during the Conservatives’ five-year parliament and reach one in nine by 2020, which would account for more than 3 million people.
The report found that in regions including the North East, East Midlands and Wales, this rate of improvement was actually better with one in seven workers expected to be cashing in the minimum wage over the same time period. Further specific breakdowns also demonstrated that women and older workers are most likely to be impacted by the changes, as well as a substantial 40% of those working within the hospitality sector.
Adam Corlett, economic analyst at the Resolution Foundation, said: “Over a million workers will get a welcome pay rise today [Thursday 1st October 2015] as a result of the latest increase in the minimum wage.
“Today’s 20p rise is relatively conservative given the strength of the labour market, but most of those on the minimum – and many just above it – will get a far bigger increase in April as a result of the national living wages announced in the budget.
“The new ambition shown by the chancellor is welcome. But it will mean that around one in seven private sector workers will have their pay directly set by government by 2020. Given the scale of the change, government must now work closely with the Low Pay Commission and employers to ensure the policy is a success. It’s also important that businesses offer low-paid staff more opportunities for promotion and progression so that they don’t get stuck on the wage floor.”