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Published
Jul 6, 2015
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Study says raising UK minimum wage would benefit businesses, staff

Published
Jul 6, 2015

“The Living Wage: an economic impact assessment,” a new economic analysis from KPMG, has revealed the benefits of raising the UK minimum wage to a Living Wage.

London's Regent Street | Source: regentsstreetonline.com


According to the report, doing so would cost just 1.3% of the national wage bill and lift six million people out of poverty. Early adopters have seen clear benefits to their businesses. The UK minimum wage is £6.50 and will increase to £6.70 in October, while the Living Wage is £7.85 (£9.15 in London).

KPMG looked at different scenarios to see how the increase to workers' wages might be paid for, and found that the average gain to the public finances across the different scenarios is just over £4 ½bn of additional revenue from taxes and reduced benefit payments.

Marianne Fallon, Head of Corporate Affairs at KPMG said: “We firmly believe that voluntary adoption of a Living Wage policy by employers, over time, is one of the tools that will help improve social mobility in the UK as well as directly addressing in–work poverty.”
 
“As a firm who has paid the Living Wage since 2006, we have seen the benefits of lower absence and a more engaged workforce. We understand that this is a complex issue for employers and policymakers, but our research shows that there is more to be gained by employers adopting a Living Wage strategy integrated within their broader business strategy.”

The research comes ahead of the Budget on July 8 and there is speculation that the Chancellor could aim to incentivise companies into paying higher wages for lower paid workers. 
 

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