The total impact of the change is to shift the share of national income going to employees back to the levels of the early 2000s. [...] NIESR reported to the Low Pay Commission, in 2013, that “companies may have adjusted to the increases in labour costs as a result of the NMW by raising labour productivity and by reducing profitability.”10 As we will see below, in the context of rapid improvements in productivity, the option to reduce margins to sustain higher wages is particularly appealing from the viewpoint of the social good. [...] The median takes the middle wage paid in a ranking of all the wages, and so is not affected by the ends of the distribution in the same way. [...] But the growth of the total paid share (employed and self- employed earnings) is much slower than the growth of the self-employed share of the workforce, indicating the relatively poor returns (and, indirectly, high insecurity) of this form of work. [...] But we would argue the growth of compensation brought about the increased minimum wage is preferable to simply allowing the economy (and wages) to follow the official forecasts, and this is because the increase in the minimum wage builds in a dramatically progressive shift in the balance of earnings.
- Pages
- 56
- Published in
- United Kingdom
