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.
- Low Pay Commission (LPC) estimates suggest that around 5.1 per cent of all jobs were minimum wage jobs as of 2013, totalling 1.3 million jobs.
- A 2010 survey of British political scientists by the Institute of Government voted the National Minimum Wage the most successful government policy of the last 30 years.
- The introduction of the minimum wage in 1999 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.
- Research by Professor Richard Dickens underpinned the 2010 change in legislation to make 21-year-olds eligible for the minimum wage.
- The legislation introducing a minimum wage in Hong Kong in 2011 references CEP research in several places. The policy is estimated to benefit 270,000 low-paid workers, or around 10 per cent of the working population.
- The research was also cited in German debate prior to the introduction of a national minimum wage from 2015.
About the research
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 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. 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.
A 2010 legislative change that made 21-year-olds eligible for the minimum wage was directly influenced by research led by Professor Richard Dickens at the University of Sussex, which showed no negative effects of this age group being paid the adult rate. Separate research by Professor Mark Stewart at the University of Warwick and Professor Jo Swaffield at the University of York looked at the impact of the minimum wage on low-skilled and low-wage workers, and found little impact on employment and only a modest impact on working hours - directly assisting the LPC's policy decisions.