As of Wednesday this week, national minimum wage in the UK has increased by 6.2% for those aged 25 and above. This now means that any minimum wage worker over 25 will now be paid £8.72 per hour.
For 21 to 24-year olds it has increased by 6.5% to £8.20 per hour, and up 4.9% to £6.45 for 18 to 20-year olds. The large increases were announced last December but only came into effect on the 1stApril, the start of the financial year in the UK.
According to a report by the Low Pay Commission in 2019, minimum wage workers account for 7% of the total UK workforce, around 2 million people, with most of them working in retail, hospitality, cleaning, and maintenance.
As Covid-19 continues to cause havoc throughout the UK economy, many low-paid workers have been forced to stay at home and are unable to work. For those working in hospitality which has been hit particularly hard by the country-wide lockdown, workers will only benefit from the minimum wage increase if they have been retained by their employers.
With the UK government stepping in to pay up to 80% of retained worker’s wages, it is hoped that this will avoid mass unemployment and those in low-paid jobs will keep receiving their monthly pay-packet. For the wellbeing of the nation, this is particularly important as minimum wage workers are often those who rely most desperately on their little but much needed monthly income.
THINK LIKE AN ECONOMIST!
Q1. What is meant by the term minimum wage?
Q2. Explain one advantage for an economy of introducing a minimum wage.
Q3. Analyse the impact that increasing the minimum wage might have on businesses in the UK.
Q4. Assess the impact of increasing the minimum wage in order to improve living standards throughout an economy like the UK.
Click here for the source article
