National Living wage Flashcards
What is the NLW now?
All workers aged 25 and over are now legally entitled to at least £7.20 per hour.
What’s the new NLW?
The DWP is set to increase the living wage to £9.75 an hour in London (previously £9.40) and £8.45 in the rest of the UK (£8.25
Political context:
What was Osborne trying to achieve
To create a higher-wage, lower-welfare economy
and ideologically building an economy that works for all
What does NLW aim to do?
continue to increase to reach 60% of median earnings by 2020, subject to sustained economic grow.
Why does NLW ables to reduce poverty and the dependency ratio?
Work should be the surest way out of poverty
On the other hand what is the effect of low pay?
Low pay makes it difficult for employees to find time for community and family life.
The situation for families by the Centre for Social Justice
Many families are left with only 4p on average after spending near to 96% of their income on ‘survival’
What about the responsibility side of NLW
• quotes
The Living Wage Employer Mark and Service Provider Recognition Scheme provide an ethical badge for responsible pay.
Advantage of NLW
• Facts
The wage was set to transform earnings, helping 800,000 workers out of low pay by 2020
Advantage of NLW
• Fairness
NLW implies fair pay
Advantage of NLW
• Employers’ attitude
From viewing workers as a cheap and disposable commodity to one which sees them as a resource that needs to be invested in.
Disadvantage of NLW
• Job lost
The Office for Budget Responsibility has warned that 60,000 jobs will be lost and reduce hours worked by four million as a direct result.
Disadvantage of NLW
• Employer
The extra costs may mean employers might not be able to afford as many workers, especially for small business.
Penalty for non-payment of the NLW
From 1 April 2016, penalties will be doubled, from 100% of the money owed, to 200%. Employers found guilty can be disqualified as a company director for up to 15 years.
Success of NLW
• The story
The London mayor, Sadiq Khan, expedites its coverage to all Transport for London’s sub-contractors.
Success of NLW
• Result
pay increase under new cleaning and security contracts covering all London Underground’s stations and depots as well as Transport of London facilities.
Failures
For those who are under 25, they will be about £1000 worse off over the next 12 months in spite doing the same amount of work as a 25 after the introduction of NLW in April 2016.
Supporter
• Paul Johnson
NLW have, in the longer run, a huge effect on the British labour market, because it’s going to affect such a large fraction of workers.
Critics
• TUC
the government must ensure that younger workers are not left behind; 21 to 24 year-olds should will not be seeing an increase. Future wage increases must narrow the pay gap between old and young
Failures during the Coalition
Working people were on average £1,6000 a year worse off during the Coalition because wages have lagged behind prices.
Effect of the NLW and Apprenticeship levy
According to the British Retail Consortium, which represent shops, has claimed that as many as 900,000 jobs could be lost in the sector, as a result of both the NLW and the Apprenticeship levy
