IEA: Osborne’s Living Wage Hits Poor, Young, Minorities, Consumers, Taxpayers

go

George Osborne’s Living Wage is likely to see those it is supposed to help lose out, according to a new report from the Institute of Economic Affairs. The IEA finds that modest minimum wage increases may not cause higher unemployment, but large increases will. Who are the losers? The young, unskilled, minorities and those in the regions:

“Minimum wage increases are always potentially a trade-off, between raising pay for those fortunate enough to keep their jobs and hours against the potential reduction in labour demand. Any significant reduction in demand will hit young and unskilled workers, particularly those from minority groups, hardest. It is also likely to have a bigger impact in some parts of the country than others… the ‘bite’ of the National Minimum Wage has been considerably deeper in Northern Ireland and the East Midlands than in London.”

Higher unemployment is a long-term consequence:

“the longer-run impact of the minimum wage might be to generate larger reductions in employment”

And low-paid earners don’t actually benefit as they lose out in other ways:

“firms such as B&Q and Waitrose have been accused of lowering premium pay for weekends and other ‘unsocial hours’, while Caffe Nero staff seem to have lost the perk of free paninis – showing that minimum wage increases are no ‘free lunch’. Those gaining from pay increases therefore lose out in other ways than jobs or hours lost”

The report concludes that someone ultimately has to pay for any sharp minimum wage increase:

“the cost can only be borne by consumers paying more, shareholders getting reduced dividends, or taxpayers paying more”

The Living Wage might make political sense – it leaves Labour with nowhere to go – but the evidence is it hinders those it is supposed to help…




Tip offs: 0709 284 0531
team@Order-order.com

Quote of the Day

Jeremy Corbyn on Big Ben Bong Ban

“… if we have to miss Big Ben in reality for a while so that work can be done, well, that’s something we have to go through. It’s not a national disaster or catastrophe.”

Sponsors

Guidogram: Sign up

Subscribe to the most succinct 7 days a week daily email read by thousands of Westminster insiders.
Fears For Chapman Fears For Chapman
Why Transition Must Be Short Why Transition Must Be Short
PICTURES: Seumas’ Temper Tantrum PICTURES: Seumas’ Temper Tantrum
Don’t Believe ‘Victory For Hammond’ Spin Don’t Believe ‘Victory For Hammond’ Spin
Friday Caption Contest: Commando Chappers Edition Friday Caption Contest: Commando Chappers Edition
Angry Adonis Wanted ‘Office for Students’ Job Angry Adonis Wanted ‘Office for Students’ Job
Listen: Rees-Mogg vs Chapman Listen: Rees-Mogg vs Chapman
City Envoy Slams “Bewildering” Brussels City Envoy Slams “Bewildering” Brussels
Labour Pledged to Sell-Off Public Land Labour Pledged to Sell-Off Public Land
Corbyn’s ‘Local GPs’ Visit Staged by Labour Spin Doctor Corbyn’s ‘Local GPs’ Visit Staged by Labour Spin Doctor
Joly-Gone: Maugham Deletes Centre Party Plan Joly-Gone: Maugham Deletes Centre Party Plan
Milne: North Korea ‘Rational’ to Have Nukes Milne: North Korea ‘Rational’ to Have Nukes
LibDem Chief Exec Out LibDem Chief Exec Out
Jones Ditches Momentum For Radio Show Jones Ditches Momentum For Radio Show
Chlorine Chicken? EU Mired in Food Safety Scandals Chlorine Chicken? EU Mired in Food Safety Scandals
Juncker’s Junkets: Commissioners’ €500,000 Expenses Juncker’s Junkets: Commissioners’ €500,000 Expenses
Owen Jones in for Nawaz on LBC Owen Jones in for Nawaz on LBC
Watch: Maduro’s Thugs Executing Opponents Watch: Maduro’s Thugs Executing Opponents
Inside Baroness Scotland’s Home – But No Pictures Allowed Inside Baroness Scotland’s Home – But No Pictures Allowed