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It may be April fool’s Day, but this is no joke!
From today companies in Britain will be implementing the new minimum wage revamp.
Workers aged 25 and over will now earn a minimum hourly gross wage of £7.20 compared with £6.70 under the former so-called minimum wage. Around 1.8 million employees will benefit from the 7.5 percent increase.
This re-brand brings Britain more in line with our European counterparts. In Ireland the minimum wage sits at 9.15 euros per hour, in Germany the minimum wage is 8.5 euros, and in France, it stands at almost 9.70 euros for experienced adult workers.
Currently unemployment is relatively low at around 5.0 percent, however it is argued that large inequalities persist and while the NLW is significant it is more symbolic and should not be exaggerated.
The NLW will affect just 0.1 percent of the country's payroll, while workers under the age of 18 will still earn below £4.00 an hour.
The Living Wage Foundation argue that the hourly rate of £7.20 is below their recommended guidelines. They claim that that workers aged 18 and over should earn at least £8.25 an hour, rising to £9.40 in London where housing rents tend to be far higher compared with outside the capital.
Katherine Chapman, director of the Living Wage Foundation said "Today's new legal minimum is an important step forward in tackling low pay in the UK. We welcome the news that millions of workers will get a pay rise. However, the job is not done when it comes to tackling low pay".
While workers may be rejoicing their victory, there are some businesses less enthusiastic. Business lobby group the Confederation of British Industry (CBI) gave a lukewarm response to the National Living Wage.
Josh Hardie, deputy director-general for policy and campaigns at the CBI said "Companies are committed to raising prosperity and living standards, but for wage increases to be sustainable they must go hand-in-hand with productivity growth. If the National Living Wage doesn't get this balance right, it will risk being unaffordable for many firms. Smaller businesses and those in key sectors like hospitality, retail and care are likely to be particularly affected”.
The Federation of Small Businesses has meanwhile called on the Low Pay Commission, an independent body advising the government on the minimum wage, to take into account any economic difficulties as the government looks to lift the NLW to around £9.00 by 2020.