Case Study Eight

Supporting the Low Pay Commission in raising the national Living Wage

Professor Melanie Simms and Dr Ben Hopkins have been collaborating with researchers from across the European Union, within a research network involving academics from Germany, Italy, the Netherlands, and Slovakia.

The project is called the neWIN projfect (Negotiating Wage (In)equality. The project report was presented to the European Commission in Brussels in October 2016 (link to report here: https://www2.le.ac.uk/departments/management/people/professor-melanie-simms/newinfinal). The impacts of wage inequality were assessed in four sectors – education, manufacturing, banking, and retail. Findings from this final sector, which investigated the impact of the national living wage on the provision of workplace benefits and the compressing of salary scales, were utilised by the Low Pay Commission in their work during Autumn 2016.

The project found that the increase from the national minimum wage of £6.70 per hour to the national living wage of £7.20 per hour had not led to the expected pooling of pay rates in the sector at this new minimum, but that retailers had endeavoured to differentiate themselves by paying at various rates above this level. In turn, this had led to a squeeze on pay differentials for those earning above the lowest salary bands, and had also come at the expense of wider benefits, such as paid breaks or evening and weekend premiums. This means a revised concentration on headline hourly rates in order to pay above the new national living wage. These findings were cited by the Low Pay Commission during the preparation of their report recommending a raise in the National Living Wage to £7.50 per hour from April 2017.

Written evidence was presented to the Low Pay Commission from the NEWIN project, funded by the European Commission, and used in the preparation of the report detailing recommendations for the setting of the level of the National Living Wage for 2017.

Further details of the NEWIN project can be found on the project website, together with country and comparative reports, or by contacting Professor Melanie Simms and Dr Ben Hopkins

Share this page: