Earnings Outlook Q4 2019

Document type
Cominetti, Nye
Resolution Foundation
Date of publication
28 March 2020
Social Policy, Poverty Alleviation Welfare Benefits and Financial Inclusion
Social welfare
Material type

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The Government’s economic policy response to the virus outbreak is focused on reducing firm’s short-term costs, to aid firm survival, and subsidising the pay of furloughed workers, to keep workers attached to firms and to limit the inevitable increase in unemployment. At the same time, the National Living Wage (NLW – the legal hourly wage floor for those aged 25 and above) is due to rise by 6 per cent next week, to £8.72. This will increase firms’ costs, and risks undermining those policies. There is a good case for delaying the minimum wage increase until October, when we’ll know more about the scale and shape of the downturn and the appropriate minimum wage response.

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