Review of the National Living Wage from 2015-2020

23 May 2022

Each year the Low Pay Commission (LPC) receive a remit from the UK government in relation to the national minimum wage rates. Within this remit is often an overarching target, the initial target following the 2015 introduction of the National Living Wage (NLW) was 60% of median earnings to those aged 25 or older by April 2020. This target was achieved. 

The latest target set is for two thirds of median earnings to be paid to those aged 21 and over by April 2024. The NLW is on track to achieve this target and the LPC are currently consulting on the minimum wage rates for April 2023.

The review of the NLW from 2015-2020 produced the following headline conclusions:

•    The National Living Wage raised wages and did not reduce employment…
•    …but the increase in earnings did not lead to higher incomes
•    We can find no evidence that the National Living Wage increased productivity
•    Minimum wage workers were less likely to move employers but continued to progress onto higher pay
•    Increasing earnings for the lowest-paid helped reduce inequality.

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