Effects of the 2006 National Minimum Wage Increase

I was interested to read an article in the new September 2008 edition of the Economic & Labour Market Review suggesting that the 2006 increase of the national minimum wage had no negative effect on job retention amongst the workers affected.

Common consensus from those against the NMW is that an increase in the wages of the lowest paid would lead to redundancies, but this report suggests that, of the data collected using the UK Labour Force Survey, there was no statistical difference in terms of employment exit before and after the introduction of the NMW in October 2006.

In fact, the report actually suggests that men were less likely to lose or change jobs as a result of the NMW – the higher wages across the board meaning a less pressing need to move from company to company in search of a better pay.

As a party of social justice Plaid is a strong believer in the rights of workers to be paid a fair living wage and this report clearly shows that the nay-sayers were wrong in their assumptions about the effects of a National Minimum Wage and its most recent increase.

Now, though, we need strong government action to make sure that this group of people are not the first, or should that be next, to feel the brunt of the economic crisis to which their flawed economic policies left us vulnerable.