National Living Wage will give millions a ‘decent standard of living' - but should be implemented with caution

Raising the National Living Wage would put millions above the threshold of being able to afford a decent standard of living, according to social policy expert.

Professor Donald Hirsch

Chancellor Sajid Javid yesterday announced that the minimum wage payable to workers in the United Kingdom would rise to £10.50 within the next five years.

He also pledged to lower the age threshold for those who qualify from 25 to 21.

The current rate for the NLW is £8.21.

However, the Living Wage Foundation, which independently calculates the recommended minimum wage to cover workers' basic needs, says it should already be £9 across the UK and £10.55 for those in London.

The news has been welcomed by Loughborough University's Professor Donald Hirsch, who runs the Centre for Research in Social Policy (CRSP) - which sets the Minimum Income Standard (MIS) for Britain.

He also warned the plan could "backfire" and have damaging consequences if not implemented correctly.

The MIS is calculated each year and establishes how much people need to earn in order to be able to afford a decent standard of living.

Prof Hirsch, whose team undertakes the research on which the "real" living wage, accredited by the Living Wage Foundation, is based, said: "The Chancellor is right to say that his target for a Living Wage, if delivered, would be internationally pathbreaking on ending low pay.

"For the first time, it would potentially raise minimum wages to above the level which our research suggests is currently needed for workers to reach a minimum living standard.

"It would also make a big difference to lower the age for the National Living Wage to 21 from 25, reducing the scope for substituting younger workers for older ones because they are cheaper.

"The big question though comes with implementation.

"The previous Chancellor said that he would only raise the National Living Wage further if it could be shown that this does not destroy jobs by making workers more expensive.

"Will Mr Javid exercise such caution, or go ahead, come what may, in delivering on this ambitious target.

"The higher you raise minimum wages, the greater is the risk where you risk this policy backfiring if it's shown to have damaging consequences."

Prof Hirsch is available for interviews.


Notes for editors

Press release reference number: 19/148

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