Chancellor Rachel Reeves confirmed in the Autumn Budget that the minimum wage will rise. Let’s take a look at the implications for jobs, the standard of living, and the economy as a whole.
The details
The minimum wage will rise next year to £12.21 an hour, which is an increase of 6.7%. For 18- to 20-year-olds, it will rise by £1.40 to £10 an hour, with the aim of eventually moving 18- to 20-year-olds onto the same rate as other adults. Apprentices and 16- and 17-year-olds will see an increase of 18% to £7.55 an hour.
While these increases are significant, they still fall short of the £12.60 an hour that is calculated to be the UK living wage. You can read more on how the living wage is calculated here
Which sectors are affected?
While any sector can have employees on the minimum wage, the areas that are most affected will include retail, hospitality, and social care. Many in these sectors will see a welcome rise in their wage, which may help recruitment. If care worker jobs interest you, consider looking for employment opportunities through homecare providers such as
https://www.caremark.ie/job-opportunities/care-assistant-job-opportunities/.
The advantages
The aim of the increase is to make work pay; with the cost-of-living crisis, this increase will make a big difference to the lowest paid in the country. It will also have a knock-on effect on the local economies, as people on lower wages are more likely to spend locally. Their greater spending ability will benefit local businesses.
The disadvantages
There are concerns that some businesses will struggle with the costs of rising wages; for example, they may no longer have the money to invest in innovation and technology. Another concern is that some firms may try to get around the wage increase by forcing their workers to work on a self-employed basis.
The future
The government’s aim is to make work pay. No doubt the government – and others – will be monitoring the impact of the increase to the minimum wage to assess its success.
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