U.K. Parties Warned Over ‘Political Bidding War’ on Minimum Wage
U.K. Parties Warned Over ‘Political Bidding War’ on Minimum Wage
Prime Minister Boris Johnson and Labour leader Jeremy Corbyn were warned over playing election politics with the U.K. minimum wage.
In a report published Friday, the Institute for Fiscal Studies said plans set out by both the Conservatives and Labour would take the statutory pay minimum to an all-time high and dramatically increase the share of private-sector employees affected.
But while there is no evidence that recent minimum-wage rises had damaged employment prospects, there is now a risk of triggering a “tipping point,” the IFS cautioned.
“We should not be setting minimum wages via a political bidding war,” said IFS economist Xiaowei Xu. “If due consideration is not given to the balancing act involved, the risks to the very people the policy is intended to help may be quite severe.”
Under Conservative plans, the National Living Wage will rise to match two thirds of median earnings by 2024, the equivalent of 10.50 pounds ($13.50) an hour compared with 8.21 pounds now. The rate will also be extended to all workers age 21 and over.
Labour is promising to go further, saying it would raise the rate to 10 pounds an hour in 2020 if it wins the Dec. 12 election and include workers under the age of 18, who are currently entitled to just 4.35 pounds.
To contact the reporter on this story: Andrew Atkinson in London at a.atkinson@bloomberg.net
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Lucy Meakin
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