British government to push the minimum wage higher by 6% in 2020

The British government announced on Tuesday that it plans on increasing the minimum wage to £8.74 per hour with the start of the new year. The increment marks an over 6% increase in the minimum wage.

The UK’s government had previously announced that it wishes to push the minimum wage in 2020 to 60% of average earnings. The move is likely to bring it closer to its target.  

UK’s Current Minimum Wage Is £8.21 Per Hour

The unemployment rate of the UK was recently announced at a record low since 1970 while employment was noted at an all-time high. For workers who are at least 25 years old, the minimum wage currently stands at £8.21 per hour. As of April 1^st, this is likely to increase to £8.74 an hour.

The government announcement also highlighted that younger workers will also see a raise in the range of 4.6% to 6.5% this year. The increment will be dependent on the worker’s age.

According to the British Chambers of Commerce (BCC):

“Raising wage floors y more than double the rate of inflation will pile further pressure on cash flow and eat into training and investment budgets. For this policy to be sustainable, government must offset these costs by reducing others – and impose a moratorium on any further upfront costs of business.”

The minimum wage of the United Kingdom was introduced in 1999 by Tony Blair (then Prime Minister from the Labor Party). Over the years, under the committee of academics, business representatives, and trade unionist’s advice, it grew only modestly.  

Britain’s Resolution Foundation Highlights The Risks Of Quickly Increasing The Minimum Wage

2015 saw multiple complaints of static living standards from the workers in the UK, following which, George Osborne of the Conservative Party in his capacity as the finance minister had announced that he plans on improving the minimum wage to at least 60% of average earnings by the year 2020. The higher annual increments, he had commented, will be applicable to workers over the age of 25.

On the other hand, Britain’s renowned anti-poverty think-tank, Resolution Foundation, suggested the government in May 2019 to avoid being overenthusiastic in fueling the minimum wage’s growth rate as it increases the risk of those working on lower pays being priced out of their employment once the next recession comes knocking.  

Prime Minister Boris Johnson, however, claimed in his campaign for the UK’s general election on December 12^th that he is confident that the minimum wage will be increased to £10.50 per hour by 2024.