William Eichler 19 August 2016

National Living Wage should be ‘abandoned’, think-tank says

National Living Wage should be ‘abandoned’, think-tank says image

The planned move to the National Living Wage (NLW) should be ‘abandoned’, free-market think-tank says.

A new report by the Institute of Economic Affairs (IEA), entitled And how much do you earn?, argued there is ‘scant evidence’ that the NLW is an effective tool to alleviate poverty.

Criticising what it described as the politicisation of pay policies, the IEA also called for the National Minimum Wage to be simplified and for the scrapping of the planned publication of ‘crude’ league tables on gender pay gaps.

The think-tank cited the Office for Budget Responsibility’s (OBR) forecast that the NLW will lead to the loss of 60,000 jobs and the reduction of 4 million hours of work per week.

This suggests, the IEA claimed, that wage floors have a significant negative effect on employment levels. Any gains received in higher pay, they warned, must be weighed against job losses, and the loss of hours and benefits.

The report recommended Scotland be given devolved authority over its minimum wage and for the rest of the UK, the Low Pay Commission should have its authority restored to take in to consideration the impact of the minimum wage level on the labour market.

On the gender pay gap, the think-tank said there is no evidence to suggest that any differences between male and female pay can be attributed to employer discrimination.

They argued between the ages of 20-39 women's median earnings are now higher than men’s and that variations in pay represent different patterns of employment, different skills and different lifestyle choices and priorities.

Commenting on the report, author Ryan Bourne, head of public policy at the Institute of Economic Affairs, said: ‘Price controls in wage-setting have severe negative consequences. Regulations that try to influence wages in order to meet an arbitrary target will create perverse incentives in hiring and compensation decisions.

‘Sadly, rather than accepting that employers and employees come to agreements about pay according to specific job, pay policy is being driven by popular misconceptions, such as that pay levels are determined by discrimination, or that pay should compensate workers for their living costs.’

‘Where political views on pay are concerned, we have seen a regression to the meme,’ he added.

Declaring a climate change emergency image

Declaring a climate change emergency

Local authorities can play a key role in tackling climate change – and there is plenty for them to do. Never before has thinking globally and acting locally been more important, says Mark Whitehead.
Open letter to Boris Johnson image

Open letter to Boris Johnson

The MJ's editor Heather Jameson asks the new PM a simple question: do you want to fund local government or do you want to scale back services to the basics?
Highways jobs

Senior Traffic Engineer

East Riding of Yorkshire Council
£32,029 - £34,788 per annum
Currently seeking an enthusiastic and experienced individual to manage our Traffic Team. East Riding of Yorkshire
Recuriter: East Riding of Yorkshire Council

ESCA Development Assistant

Essex County Council
£20000 - £22200 per annum + Excellent Benefits Package
ESCA Development Assistants will work at the heart of the team to deliver administrative tasks in support of all programmes and projects across Children & Families and Adults and financial monitoring. England, Essex, Chelmsford
Recuriter: Essex County Council

ASC Senior Social Worker - Physical & Sensory Impairment Team

Essex County Council
£38400 - £46475 per annum
Job Purpose ECC Adult Social Care, through effective practice, is moving towards a transformational shift from a focus on long-term care support, to a England, Essex, Harlow
Recuriter: Essex County Council

Head of Operational and Commercial Services

Copeland Borough Council
£66,273.48 per annum
Looking for a professional with ambition and inspirational leadership qualities, with operational service and... Cumbria
Recuriter: Copeland Borough Council

Customer Service Assistant

Brent Council
£22,779 - £24,030 p.a. Inc.
An exciting and challenging opportunity has arisen within the Customer Services section. Wembley, London (Greater)
Recuriter: Brent Council

Local Government News

Latest issue - Local Goverrnemnt News

This issue of Local Government News explores how councils can tackle modern slavery and trafficking in their supply chains, finds out more about Cambridge's first cohousing scheme and the launch of a new project to build a shared service pattern library for local government.

This issue also contains a special focus on children's services and how councils are protecting children following local safeguarding children boards being abolished.

Register for your free magazine