The UK's Low Pay Commission has for the first time analysed the impact of the introduction of the National Living Wage, with the measure having achieved its initial target: to represent 60% of median earnings for those over the age of 25. According to the National Living Wage review, unveiled by the UK government on 18 June, one of the strengths of the NLW is that it has helped to close the gender and ethnicity pay gaps in the country. However, it has not generated the boost to productivity that the government had hoped for.
A surprise announcement back in 2015 (see article n°9180), the National Living Wage replaced the statutory minimum wage from 2016, leading to an immediate 7.5% increase in the minimum wage. At the time, companies feared mass redundancies (see article n°9540), especially as further pay rises were set to follow each year. However, the Low Pay Commission’s review of the pre-pandemic period from 2016 to 2020 did not observe any job losses linked to the NWL. This is despite the fact that the NWL inc
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