Minimum wage rise is good news for lowest paid workers
Released On 27th Nov 2022
Low-paid workers were given a welcome boost in Jeremy Hunt’s Autumn Statement with the announcement that the National Living Wage (NLW) would rise by almost 10 per cent.
From April 1 2023, the NLW will go up by 92p to £10.42, an increase of 9.7 per cent, to go some way to protecting the poorest paid employees’ standard of living.
The Low Pay Commission’s (LPC) recommendations ensure the NLW continues on track to reach the Government’s target of two-thirds of median earnings by 2024. The recommendations were unanimously agreed by Commissioners and accepted in full by the Government.
Bryan Sanderson, Low Pay Commission Chairman, said: “The rates announced include the largest increase to the NLW since its introduction in 2016 and will provide a much-needed pay increase to millions of low-paid workers across the UK, all of whom will be feeling the effects of a sharply rising cost of living. For a full-time worker, today’s increase means nearly £150 more per month.”
Alongside the announcement, the LPC has published a letter of recommendations to the Government and a summary of the evidence that informed them. Their full 2022 Report, which sets out the evidence in detail, will be published and laid in Parliament later this year.
The increases announced in the Statement will support the wages and living standards of low-paid workers at a time when many are feeling increased pressure from a rising cost of living.
They are recommended against a backdrop of a tight labour market where unemployment is at record lows and vacancies remain high as businesses compete to recruit and retain staff.
Mr Sanderson said: “The tightness of the labour market and historically high vacancy rates give us confidence that the economy will be able to absorb these increases.
“Businesses also have to navigate these economically uncertain times and by ensuring we remain on the path to achieve our 2024 target, employers will have greater certainty over the forward path.
“These recommendations have the full support of the business, trade union and academic representatives who make up the Commission.”
Alongside the NLW, the Commission recommended significant increases in the National Minimum Wage (NMW) rates for younger workers. The 21-22-Year-Old Rate will increase to £10.18, narrowing the gap with the NLW and leaving this age group on course to receive the full NLW by 2024. NMW rates for 18-20 and 16-17-year-olds and apprentices will increase in line with the NLW increase of 9.7% in recognition of the tight labour market and strong demand for labour in youth-friendly sectors.
