Topic > The National Minimum Wage - 1866

On 1 April 1999, the National Minimum Wage (NMW) was introduced in the UK at a rate of £3.60 per hour for workers aged 21 years and at a rate of £3.00 for workers aged 18 to 21. Since then, it has grown steadily to a rate of £6.31 per hour today. The NMW is “the minimum hourly wage to which almost all workers are entitled by law” (www.gov.uk). In 1999, 1.9 million people were paid less than £3.60, sometimes even below the minimum wage, due to the Thatcher government's dismantling of trade unions. The idea of ​​a minimum wage subsequently emerged, supported by the Labor Party, to reduce growing poverty and prevent low-wage workers from being exploited by their employers. The Conservative Party, supported by employers, has strongly opposed this plan, arguing that a minimum wage would damage the economy and create poverty through rising levels of unemployment. So how does the NMW actually impact poverty and employment in the UK? This essay will first analyze the implementation and evolution of the NMW. The different arguments of both supporters and critics of this measure will then be examined. Finally, we will discuss the relevance of these topics today and see the extent to which the NMW has impacted employment levels while representing a step forward against poverty. In 1997, after expelling the Conservative Party at the election, the Labor government introduced a minimum priority as its first priority. Following the National Minimum Wage Act 1998, the Low Pay Commission (LPC) was established. This commission is an independent body made up of 9 Low Pay Commissioners representing the different social partners with people chosen from employees, employers or with an academic background. The communication... middle of paper... has happened and since 2001 critics of the NMW have been gradually changing their minds as the LPC has managed to increase the wages of low-wage workers without leading to any substantial reduction in employment. The NMW also has more positive than negative aspects, having reduced poverty and wage inequality with only modest effects on employment and having favorably affected productivity, while reducing business profitability by only a small percentage. In a monopsony, the NMW could even increase employment if an adequate wage was implemented. Overall, it can be said that the national minimum wage is an important tool for improving a country's well-being and boosting its economy. However, having only been established for 15 years, we are now able to capture the long-term effects of the NMW; or should we wait another ten years to draw conclusions about the effects of the NMW on employment and poverty ?