‘Abandon national living wage’, think tank urges

A new report by the Institute of Economic Affairs (IEA) has stated that the planned more to the national living wage should be abandoned.

The report, ‘And how much do you earn?’, based this belief on ‘scant evidence’ that the national living wage is an effective tool to alleviate poverty.

The IEA has also argued for the national minimum wage to be simplified and for the scrapping of the planned publication of ‘crude’ league tables on gender pay gaps.

Ryan Bourne, head of Public Policy at the Institute of Economic Affairs, said: “Price controls in wage-setting have severe negative consequences. Regulations that try to influence wages in order to meet an arbitrary target will create perverse incentives in hiring and compensation decisions.

"Sadly, rather than accepting that employers and employees come to agreements about pay according to specific job, pay policy is being driven by popular misconceptions, such as that pay levels are determined by discrimination, or that pay should compensate workers for their living costs. Where political views on pay are concerned, we have seen a regression to the meme."