UK, NY, and CA increase National Living and minimum wages in same week

One of the Chancellor of the Exchequer, George Osborne's big ideas was to increase the National Living Wage (NLW) on 1 April 2016 and wasn’t an April Fools! Not to be confused with either the National Minimum Wage or the Living Wage; this NLW increase should be popular with 1.3m workers aged over 25 who will immediately benefit, boosting the incomes of many of the U.K.'s poorly-paid employees. Though some employers particularly from small businesses have said it will have a negative impact on their profits. It is calculated by academics as the level of pay that would give workers sufficient for a basic standard of living.

The NLW will be paid to workers aged 25 and over, and will be initially set at £7.20 an hour, with a target of it reaching more than £9 an hour by 2020. Part-time and full-time workers will be paid this wage. Some employers, particularly those in London have pledged to pay even more than the NLW! At the moment, the amount is £8.25 an hour and £9.40 an hour in London.

Some companies have agreed to pay at least this amount and include FTSE 100 companies such as Aviva, Barclays and Legal & General and there are a few big local authorities who also pay the living wage. Mr Osborne said that there was an ambition that the National Living Wage should continue to increase to reach 60 percent of median earnings by 2020, subject to sustained economic growth. It is that calculation that leads to the aim for the NLW to be more than £9 by 2020.

The Office for Budget Responsibility has warned that 60,000 jobs will be lost as a direct result and reduce hours worked by four million a week. Fashion chains, supermarkets and the hospitality sector are expected to raise wages and from 1 April, penalties for non-payment of the NLW will be doubled, from 100 percent of the money owed, to 200 percent. Plus, any employer found guilty can be disqualified as a company director for up to 15 years.

While across the pond, California lawmakers voted on 31 March to raise the state’s minimum wage to $15 an hour for all workers, on the same day, New York governor Andrew Cuomo struck a similar deal to pay workers there $15 too! At $10 an hour, California is already tied with Massachusetts for the highest minimum wage of any state in the States. The estimated 5.6 million California workers affected by the increase will see their annual pay rise an average of 24 percent according to the Center for Labor Research and Education at the University of California, Berkeley. The vast majority of the affected are adults employed full-time. Increasing the minimum wage in America and the NLW in the U.K. is a reminder that the fight to raise wages also goes to the core to preserving rights, fairness and dignity for workers everywhere.

Photo Credit: torange.biz

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