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ESRC:
Paving the way for the Minimum Wage

19 January 2015

ESRC-funded research provided crucial evidence for the introduction of a UK National Minimum Wage in 1999, encompassing 1.3 million workers in 2013. The research was cited prior to minimum wage legislation in Hong Kong in 2011 and Germany in 2015.

When exploring the impact of a UK National Minimum Wage in 1997, the Low Pay Commission (LPC) relied heavily on research by Alan Manning, Stephen Machin and Richard Dickens at the ESRC Centre for Economic Performance (CEP) to assess claims that a minimum wage would destroy up to two million jobs. The research, which investigated the impact of Wages Councils and the agricultural sector's minimum wage legislation, did not find any evidence that the minimum wage led to large-scale job losses.

Following recommendations from the LPC, the National Minimum Wage was subsequently introduced in 1999. The introduction of the minimum wage raised the pay of around 1.3 million low-paid workers by around 15 per cent overnight. By 2006 more than two million people received the minimum wage.

A 2007 CEP assessment of the impact of the minimum wage showed that it had raised the real and relative pay of low-wage workers, narrowed the gender pay gap and positively influenced pay for one in ten workers.

This article was published online by the ESRC on January 19, 2015
Link to article here


Related publications
Minimum wages: the economics and the politics, Alan Manning. Article in CentrePiece Volume 19, Issue 1, Spring 2014


Related links
Alan Manning webpage
Labour Markets Programme webpage
Community Programme webpage

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