that wages increased faster in areas with more minimum wage workers. A 1% increase to minimum wage is associated with a 2-2.5% increase in wages at the fifth percentile, a 1.5-2% increase at the tenth percentile and 1-1.5% at the 20th percentile. The second section of the research studied how the first two years of the NLW being implemented affected the ability of minimum wage workers to move into higher-paying jobs. Jobs were divided into three groups based on pay –they were minimum wage jobs, ‘low-paid’ jobs (more than NLW but less than 2/3 of average wage) and ‘high-paid’ jobs (paying more than 2/3 of the average wage). The research again utilised the variation in minimum wage coverage across areas to explore the NLW’s effect on moves out of minimum wage employment. The findings demonstrated that roughly half of minimum wage workers moved into jobs that paid above the minimum wage each year but that around 80% of those moves were into ‘low-paid’ employment, with only 20% securing ‘high-paid’ jobs. Over three years, moves to high-paid jobs occurred only slightly more frequently than over a year. There was minimal proof to suggest that the higher NLW made it more difficult for minimum wage workers to move into higher-paid jobs. The overarching findings were that the NLW has ‘compressed’ pay distribution and that wage inequality has decreased since its introduction. Workers earning above the minimum received faster increases than they would have done ordinarily but this compression has not led to more minimum wage workers becoming ‘stuck’ in lower-paid jobs and the rising minimum wage has had no negative impact on the number of minimum wage workers moving into higher-paid jobs. The parting message is that the LPC will continue to explore this topic and that the project has now been expanded to investigate the effects on progression of the 2018 uplift to £7.83.
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Low Pay Commission announces regional visit programme for 2020 28 January 2020
The Low Pay Commision (LPC) has been making regional visits for over 20 years and classes the exercise as a crucial element of its annual programme. The body has now released information relating to the dates and places it will be visiting over the course of 2020 and encourages individuals to get involved. The LPC confirms that data alone provides only a limited insight into the effect and importance of its work, but that meeting employees who are earning the minimum wage or employers who make decisions on the basis of its recommendations really adds value to the work it carries out. Face to face meetings in previous years have highlighted new perspectives and provided results that did not become apparent from data until much later on. The schedule for 2019 included visits to flag-makers in Swansea, bartenders in Ayr, brewers in Hartlepool and fruit growers in East Anglia. Participants in the programme for last year included employees from a range of age brackets and employers from different sectors such as care, hairdressing and manufacturing, varying from local to national in presence, both small and large in size. The LPC will be visiting Stoke-on-Trent, Belfast, Aberystwyth, Weymouth and Portland, Dunfermline and Fife and Sheffield on dates throughout March, up until August. The locations were carefully selected based on minimum wage coverage, local levels of employment and how long it has been since the LPC visited them last. The body would be interested in meeting with workers, employers, local authorities and charities who are affected by the minimum wage. Anyone else with an interest is also encouraged to get involved. The LPC will visit participants directly or can arrange to host a meeting in the relevant area.
The LPC wants to hear about:
• Specific impacts of minimum wage on young people and apprentices • Life on low pay and the difference the minimum wage makes, along with other factors which affect quality of life and work for people at the bottom end of the labour market • How businesses have adapted to the increasing minimum wage, and the pace of the uplifts over recent years • Other factors which affect businesses in addition to the minim wage, whether that be local or national, sector- specific or more general issues
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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