Rachel Reeves expected to raise national minimum wage by 6% in 2025

https://www.theguardian.com/society/2024/oct/28/rachel-reeves-expected-to-raise-national-minimum-wage-by-6-in-2025

by UndulyPensive

9 comments

  1. I don’t understand how by increasing wages & increasing Employer NIC… this won’t lead to sizeable redundancies and increased unemployment?

  2. Can’t wait for our right wing press to tell me why this is bad for workers.

    This is a good thing people. Wages have been too low for far too long and if those on minimum wage can earn more I’m all for it.

  3. As always the real minimum wage is 0, which many more people are about to find out.

  4. So we can expect everything to get 10% more expensive…. maybe 12. This never benefits the little people.

  5. Companies will just pass that 6% straight on to their customers and we’ll be back to square one. Corporate greed and price gouging will never end until the government forces them to stop.

  6. Typical labour isn’t it.

    Using other people’s money to buy votes.

  8. Well could they announce something good, as it’s only bad news at the moment!

  9. The main issue here is disposable income. Intuitively you would say that raising the minimum wage would help with this – but that may not be the case.

    By forcing businesses (80pc of UK GDP are small and medium sized businesses) to increase their cost base significantly we may actually see prices rise as SME businesses are already struggling to run a profit as it is after years and years of sustained cost rises in every area. It is not unlikely that we may see unemployment rise as well (which in turn devalues workers)

    Not only this, but many middle earners will not likely see such a wage rise which narrows the band between a minimum wage and a “skilled” wage. This has many problems; for one it devalues skilled work and deincentivises progression or training in skills. It also makes attracting talent from overseas much more difficult at a time when we desperately need it and pushes more and more people into the minimum wage trap.

    Another huge issue the UK faces is productivity. Employee productivity in the UK has fallen way behind other established advanced economies since 2007 – this means if you are an employer in the UK right now that you are paying more than ever for wages, taxes, rents, electricity, insurance … but the workers you are hiring are “producing” less economic benefit than they should be. Combine this with the lower disposable income that almost everyone in society has now (due to high housing costs and cost of living) and not only is this business now struggling with costs but there just aren’t as many people who can afford to buy their product so they can either reduce the cost and make no profit or close down.

    In my opinion, like many of the UKs issues, this is underpinned by lack of housing and lack of investment.

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