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Professor Mark Stewart analysed the impact of the National Minimum Wage (NMW), providing a research-based answer to the question of whether a minimum wage would protect low skilled workers or leave them worse off by reducing demand for labour. Stewart analysed the NMW after it was introduced in 1999 and through subsequent upratings and consistently found negligible employment effects, modest hours effects, and little evidence of spillover effects. Stewart published reports and journal publications, supplying evidence that directly assisted the Low Pay Commission's (LPC) policy decisions. The minimum wage is now established policy, increasing earnings for millions of the UK's lowest-income workers and reducing income inequality and the gender pay gap.
The UK National Minimum Wage (NMW) is a mandatory wage floor, set annually by government following recommendations from the Low Pay Commission (LPC) that directly affect around a million low-wage workers, their families and their employers and influence the UK economy more widely. Research at York on the effects of minimum wages on the labour market outcomes of low- wage workers, particularly on hours worked, wage growth and the incentives for young people to acquire skills/education, has contributed to the LPC's evidence-base and influenced recommendations by the LPC on the NMW rates. In addition the underpinning research has informed the recent Living Wage policy debate (nationally and locally in York) and has had impact via two important York employers (City of York Council (CYC) and Joseph Rowntree Foundation/Joseph Rowntree Housing Trust (JRF/JRHT)) in relation to their deliberations on the adoption (CYC) and the benefits of adopting this voluntary wage floor within their organisations; decisions that directly affected more than 600 York-based employees in early 2013.
Research by Alan Manning and colleagues at LSE's Centre for Economic Performance (CEP) has contributed to widespread acceptance of the view that minimum wages set at an appropriate level are a valuable tool of public policy. CEP researchers had a direct impact on the design of the UK's National Minimum Wage (NMW) and thus on the living standards of poorer workers and their families. They provided the intellectual context for the policy, advised on its implementation and evaluated its effects. CEP research has had some initial impact on the introduction of the minimum wage in Hong Kong. It has also influenced debates around the world about the introduction or modification of minimum wages.
Around 55,000 young workers in Britain have benefited from a 20 per cent wage increase as a direct result of research by Richard Dickens of the University of Sussex. His work led to a legislative change (which became effective in October 2010) whereby the starting age for eligibility for the adult National Minimum Wage (NMW) was reduced from 22 to 21 years old.
More generally, Dickens' research on the wage and employment effects of the NMW has long informed the recommendations of the Low Pay Commission (LPC) — on the rate at which the NMW is set, on the associated regulations and on the LPC's evaluation of the impact of the NMW. His research has provided the LPC and the government with strong validation for the use of the NMW as a policy tool for tackling low incomes and wage inequality. It also allays fears that the NMW might lead to a damaging wage-price spiral.
Since 2001, research by Jane Wills has exposed the problem of low pay and in-work poverty in London, explored the potential solution offered by a living wage, and underpinned a successful campaign by London Citizens — an alliance of community organisations — for a living wage in the capital. As a result of the campaign, there are now 400 accredited employers who pay a living wage and up to 45,000 workers across the UK who have benefitted. In 2008, persuaded by Wills' research, Queen Mary became the first university in the UK to adopt the living wage. Now, almost all HEIs in London do the same. Wills has presented her research at the House of Commons (2009, 2012), the Marmot Enquiry (2009), and has spoken alongside Ed Miliband to support the living wage during his leadership election campaign (2010). The Labour Party supports the living wage as its policy response to in-work poverty and it will feature in the Party Manifesto ahead of the next general election. The research has focused mainly on London, yet the findings have relevance nationally and internationally, informing campaigns in Birmingham, Brighton, Glasgow, Nottingham, Wales, Canada and New Zealand.
Research at UCL provided the primary analysis of the effects of immigration on wages and the fiscal costs and benefits of A8 migration to the UK. These provided important and ongoing contributions to policy and media debates in the UK, as demonstrated by citations in key debates and policy documents in both Houses of Parliament, in commissioned studies and in the financial press. As a result, research successfully put facts and figures on immigration into a highly emotional and partisan debate.
European employment research at Manchester Business School's European Work and Employment Research Centre (EWERC) has had a significant impact on international policymaking bodies, specifically the European Commission (EC), the European Trade Union Confederation (ETUC) and the International Labour Organisation (ILO). Demonstrated policy impact includes: the defining and strengthening of a gender mainstreaming and gender pay policy in Europe; technical improvements in the European Commission's approach to the European Employment Strategy (EES) (which all EU member states are required to report on and implement); and greater precision (regarding up-to-date data and the functioning of labour market institutions) in EC and ILO policy recommendations on low wage work, minimum wages and regulation for decent work.
Southampton based research on the interactions of a minimum wage policy and tax evasion has had a direct and clearly acknowledged impact on shaping the labour market policies of Hungary and other Southern European countries, while its research on the role of universal versus targeted benefits on employment has had a significant impact on Swedish fiscal policy. Looking at labour market policies in a broader context and from a behavioural economics point of view (e.g. payroll giving), our findings on charitable giving and workers' motivation have also been used by the UK government's Behavioural Insights Team and impacted its recommendations on giving. The same research is currently influencing US policy on the tax treatment of charitable contributions.
The research for the Low Pay Commission was designed to investigate whether the enforcement of the UK's national minimum wage was effective, through the experiences of workers and employers. It showed that despite the law, only a minority of workers found to have been underpaid received their arrears in full and without detriment. The LPC subsequently called upon the government to amend the legislation to provide a more significant deterrent to non-compliance on payment of arrears. This change was implemented through the Employment Act 2008. As a result £722,000 in arrears has been paid and 1,417 workers have benefited.
The long-term impacts outlined in this case study relate to low-paid women workers in health and local government sectors in the UK. Professor Carole Thornley undertook some of the earliest and most sustained academic research focusing on these workers. Through this she identified systematic undervaluation of their skills and competencies, as well as problems with training, career advancement, pay, and payment systems. The evidence from this research has been used in successive pay determination exercises and reviews of payment systems, valuation of skills, and to inform public policy. This has put these workers higher on the agenda of both unions and employers, informing their practice and leading to improvements in training and pay conditions.