Skip to content
CityAM
Main navigation
  • News
    • News
      • Latest Business News
      • Economics
      • Politics
      • Tech
      • Banking
      • FTSE 100 Live
      • Retail
      • Insurance
      • Legal
      • Property
      • Transport
      • Markets
    • From our partners
      • AON
      • Bayes Business School
      • Canada BIDs
      • Central London Alliance CIC
      • Destination City
      • Halkin
      • Olympia
      • Inside Saudi
      • Tottenham Hotspur Stadium
      • Santander X
      • YEAR SIX Dividend
    • Featured

      ‘Great shame’: Berkeley challenges blocked Peckham development

      Aylesham Centre exterior view showcasing bustling shopping activity in the heart of the local community

      Submit a story

      Tell us your story.

      Submit
  • Opinion
  • Sport
    • Latest Sports News
      • Sport
      • Sport Business
    • From our partners
      • The Morning Briefing: SBS x CityAM
      • Aramco Team Series
      • LIV Golf
    • Featured

      Women’s rugby in England is way ahead, and the RFU deserves credit

      Breaking news scene with bustling city street, reporters gathering, and onlookers observing, highlighting urban life and m...

      Submit a story

      Tell us your story.

      Submit
  • Life&Style
    • Life&Style
      • Life&Style
      • Toast the City Awards
      • The Magazine
      • Travel
      • Culture
      • Motoring
      • Wellness
      • The RED BULLETiN
      • Do it with Shared Ownership
      • Media Speak Hub
    • Featured

      I recreated all my favourite TV tropes, from crawling through pipes to being two kids in a trenchcoat

      Amelia crawling through ventilation shaft, reminiscent of iconic Die Hard scene, highlighting TV tropes in action films.

      Submit a story

      Tell us your story.

      Submit
  • Investec
  • Events
  • Latest Paper
Wednesday 08 July 2015 10:03 pm

July Budget 2015: Will George Osborne’s new national living wage hit the number of people in work?

By: Express KCS

Add as a preferred source on Google

Sam Bowman, deputy director of the Adam Smith Institute, says Yes.

There is lots of research into what the minimum wage does to jobs. Of the 103 papers reviewed by economists David Neumark and William Wascher in a 2006 study, most of them showed that raising the minimum wage reduces long-term employment.

Of the 33 most methodologically robust studies, 28 (85 per cent) demonstrated this. The Office for Budget Responsibility estimates that the new living wage will see 60,000 job losses and a £1.5bn cost to the economy overall. This will be among over 25s, who may be their families’ main breadwinners. Until now, the Low Pay Commission has raised the minimum wage very slowly to avoid job losses, and it has often been very restrained in doing so. Those days are now over.

The people who point out that 1997’s minimum wage introduction did not lead to substantial job losses, without considering all the other evidence, are embarrassing themselves. Based on the evidence, there is a consensus: minimum wage hikes cost jobs.

Simon Walker, director general of the Institute of Directors, says No.

The last few years since the financial crash have seen wages subdued, as firms and employees prioritised job security over pay rises. But with the economy set to grow steadily for the next few years, now is the time for businesses to increase pay.

George Osborne’s new living wage is effectively an extra tier on the minimum wage for over 25s, set initially at £7.20, with the intention it will rise to £9 by 2020. This is not an insignificant extra cost for businesses, but the chancellor is helping firms to absorb it with a surprise cut to corporation tax and an increase in the National Insurance employment allowance.

If the living wage rose too quickly, it clearly could damage jobs, but Osborne has wisely asked the independent Low Pay Commission to recommend the rate, paying attention to prevailing economic conditions. He is offering a deal to companies: higher wages for lower tax. We think this is a deal business will accept.

Share this article

  • Facebook
  • X
  • LinkedIn
  • WhatsApp
  • Email

Similarly tagged content:

Sections

  • Opinion

Categories

  • Opinion

Related Topics

  • Budget
  • employment and wages
  • George Osborne
  • National Living Wage
  • People
  • UK jobs

Trending Articles

  • Revealed: Secret Treasury plan to tax State Pension before it is paid out

  • Burnham’s new chief of staff ran City firm advising Thames Water and rival Heathrow bidder

  • Two solicitors linked to Post Office scandal charged with misconduct

  • Reeves’ new tax charge on cash ISAs faces fierce industry backlash

  • Barclays and Lloyds join banking sector plan for digital ID

More from CityAM

  • Starmer ally defends minimum wage quango after Sunak calls for it to be axed

    Economics
    Labour's Pat McFadden could oversee small welfare reforms that could make reasonable savings for public finances.
  • Debt-saddled grads ‘risk earning less than minimum wage’ five years after leaving uni

    Education
    University graduation
  • ‘There’s a kind of romance to it’: Cubitts opens King’s Cross hub on site of Victorian stables

    Business
    Cubitts The Yard exterior view showcasing modern architecture and design, highlighting its urban business location.
  • Job vacancies fall again in unemployment risk 

    Economics
    People waiting outside a job centre, highlighting unemployment issues and job search challenges in the current economy.
  • The fallacy of blaming rich footballers for inequality

    Opinion
    Cristiano Ronaldo celebrates a goal during the 2026 World Cup match on June 17, showcasing his iconic jersey and skills.
  • CBI: 200,000 more Brits to face unemployment this year as growth crumbles

    Economics
    People waiting outside a job centre, highlighting unemployment issues and job search challenges in the current economy.
  • Cliff-edge warning: Fewer than 10 per cent of Brits to achieve a comfortable retirement

    Personal Finance
    Jar filled with coins symbolizing cautious saving habits of older Brits avoiding stock market investments for retirement s...
  • More than 80 retail bosses urge Starmer to tackle youth unemployment crisis

    Retail
    Labour MPs are being warned a “perfect storm” of costs facing the retail sector could see seats lost to Reform UK.

CityAM Canada — business, markets and opinion for Canadian readers.

Sections

  • Business
  • Markets
  • Tech
  • AI
  • Economics
  • Opinion
  • Cities

Company

  • About
  • Contact

Legal

  • Terms of Use
  • Privacy Policy
  • Cookie Policy
© 2026 CityAM Canada. All rights reserved.
Terms · Privacy · Cookies