Fears that National Living Wage is ‘sleight of hand’.

‘Millions of workers will receive a pay rise today when the new national living wage comes into force.

Unions welcomed the £7.20 hourly rate for adults - increasing by 50p from £6.70 - but said it was not fair that younger workers were missing out, while business groups warned that firms' paybills will "ratchet up".

The Government's aim is to increase the rate to £9 an hour by 2020, which would affect an estimated nine million workers.

Research by the Resolution Foundation found that more than one in four employees in the Midlands, Wales and Yorkshire and the Humber will benefit, compared to one in seven in London.

Owen Smith, shadow work and pensions secretary, said: "It's a typically cruel sleight of hand from the Tories to introduce their version of the living wage with one hand, while taking five times as much in cuts to Universal Credit and Tax Credits with the other.

"While this higher minimum wage for the over-25s is welcome, it will feel like an act of deception for the two million families set to lose £1,600 a year through cuts to in-work support."’ – Daily Mail

‘Our best guess is that the huge 10.6% year-on-year hike to £7.20 for the minimum wage for over 25s, plus the aim of linking it 60% of median earnings by 2020, will lead to the equivalent of 60,000 fewer people in work. Politicians speaking up for this group of workers are few and far between.

In instituting such huge wage increases, the chancellor is undertaking a risky experiment with people's livelihoods. It is easy for politicians to see these numbers and to think this is a price worth paying to increase the pay of over 2 million workers by 2020. But behind the statistics lie individuals with families to feed and ambitions to get a foot on the jobs ladder.

More troubling still, we know that many of those who will suffer as a result will be low-skilled, vulnerable workers. Research from the Social Market Foundation has shown around half of workers in the workplaces most affected by minimum wage increase are part-time, while 40% of employees affected have qualifications only up to GCSE level.

Perhaps most worrying of all, in trying to ape the Living Wage campaign in branding, the chancellor has accelerated the bizarre belief that wages should be determined according to workers' rent and fuel bills rather than the supply and demand for labour. Of course, it is far easier for politicians to declare that firms are 'not paying enough' and to compel them to pay more than to undo damaging government policies on housing, energy and childcare, which raise the cost of living. But it's not good economics.’ – International Business Times


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