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Research on the economic effects of minimum wages undertaken by Professor Stephen Machin and his co-authors changed the policy context before a National Minimum Wage (NMW) was introduced in April 1999. That and subsequent research, as well as Machin's appointment as Commissioner in 2007, have provided the guiding logic for the operations of the Low Pay Commission, the government body that makes recommendations on setting the NMW. As a result, research has directly influenced the annual setting of the NMW through 2008-2013, affecting the wages of over a million low-paid UK workers. Research has subsequently influenced policy debate in the UK, and in other countries including Germany, Hong Kong and Australia.
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.
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.
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.
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.
A new methodology has been developed that enables a more flexible approach to understanding the effects of immigration on the labour market and the native-born labour force. The key finding is that the effect of immigration on wages and employment depends on the extent of the substitutability between immigrant and native born labour. This substitutability differs at different skill levels, so that immigration has a greater effect on unskilled native born workers. This new methodology's findings have informed the debate over labour market effects and have influenced the development of related policies by Government and other key stakeholders.
The evidence produced by Professor Wadsworth's research directly has shaped or influenced policy made by government. In particular, the research has been used as input into several key policy recommendations made by the Home Office sponsored Migration Advisory Committee (MAC) (of which Wadsworth is a member) to inform the coalition government's declared aim of achieving a reduction in the levels of net migration in the current parliament to the tens of thousands. The research has been cited by numerous stakeholders in the debate on the impact of rising immigration on the labour market. There are numerous examples of citations in a public discussion, consultation document or judgement.
Research carried out at the University of Oxford's Centre on Migration Policy and Society (COMPAS) and disseminated through an accessible multimedia website, `The Migration Observatory', has transformed public and policy debate on migration and changed the practices of government departments, media, and third-sector organizations regarding migration data. As a result of COMPAS's research on public attitudes to immigration, migrants' remittance payments, and employers' demand for migrant labour, these groups have been able to make stronger, evidence-based arguments and decisions.
The impact has occurred in two main ways: (1) direct impact on public debates; and (2) changes in the practices of those participating in, or reporting on, those debates. The direct impact has included evidence for arguments against new restrictions on student immigration, and related arguments in favour of changing the way student immigration statistics are tracked. It has also included shaping deliberations on the potential for developing new measures of remittances by the Office of National Statistics. Changes in practice have involved the dissemination of research and data through the vehicle of the Migration Observatory. The Observatory has enabled journalists, civil servants, parliamentarians, and NGOs to use a more accurate and impartial evidence base in debates on migration issues, and to inform the public about such issues.
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.
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.