Research and analysis

National Minimum Wage: impact on low-paying companies. Bondibene, Riley

The impact of the National Minimum Wage (NMW) on a range of outcomes for low-paying companies in the UK.

Document

The impact of the National Minimum Wage on firm behaviour during recession

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Details

This paper from the National Institute of Economic and Social Research shows how the introduction of the National Minimum Wage (NMW) in 1999 affected low-paying companies in the UK.

It finds that:

  • on introduction, the NMW increased average labour costs for low-paying companies
  • companies may have adjusted to the increases in labour costs as a result of the NMW by raising labour productivity and by reducing profitability
  • the NMW has not changed average employment or investment rates for these companies
  • the NMW has not had a detrimental impact on firm outcomes since the financial crisis and the recession of 2008
Published 9 August 2013