Will the new National Living Wage cost jobs?
In July 2015, the Chancellor George Osborne announced that a new National Living Wage (NLW) would replace the National Minimum Wage (NMW) for those aged 25 and over starting from 1 April 2016. The NLW will initially be set at a level of £7.20 per hour – 50 pence higher than the prevailing NMW.
By 2020, the Chancellor expects the NLW to reach £9 per hour, which is 13% higher than the £8 previously planned. Will the new national living wage lead to significant reductions in employment and higher inflation?