How to introduce a national minimum wage- the UK example

Abstract

The article deals with the introduction of the national minimum wage (NMW) in the United Kingdom. It describes the background to the debate, dealing with, among other things, developments in collective bargaining policy, deregulation and the positions of the political parties. It also touches on the changes that have occurred in the thinking of the TUC and the Labour Party. The establishment of the tripartite Low Pay Commission (LPC) and the way it has operated are described in some detail. Particular attention is paid to the procedure used by the LPC to collate evidence, and especially to the official discussions with employers, trade unions and other groups. The article presents the main recommendations of the first two LPC reports and explains their impact on income distribution. A number of specific questions are looked at in some detail, including the problems of data availability, international comparisons, methodology, young people, the periodic adjustment of the minimum wage and consequences for the trade unions.