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Sunday, April 26, 2026

Britain's Minimum Wage Law Has Been an Abject Failure - Jacobin magazine

Twenty-five years ago this week, the National Minimum Wage Act 1998 was passed, receiving Royal Assent to go on the statute book. The resultant national minimum wage was introduced on April 1, 1999 following the establishment of the Low Pay Commission, which is charged with making recommendations to the government on the rates. It was not an “April Fool,” but neither could it be said to be the bold advance many in New Labour said it was.

Tony Blair had vowed to lift people out of poverty, especially children, and the minimum wage was one of the flagship policies by which he sought to do so. It was part of the New Labour “welfare-to-work” active labor market program in which work would pay more than being on welfare.

In the year of its introduction at the Labour Party conference, Blair batted back the arguments used against it, saying that it would not lead to job losses, inflation, or company bankruptcy. He was proven right on all three scores. But the reasons for that can be found in the timidity of the national minimum wage.

When the national minimum wage was established, the rate for those over twenty-two years old was just 3.60 per hour, and for those between eighteen and twenty-one, it was even lower at 3.00 per hour. In 2023, there are now five rates: 10.42 per hour for those over twenty-three years old, 10.18 for those between twenty-one and twenty-two years old, 7.49 for those between eighteen and twenty years old, 5.28 for those between sixteen and seventeen...



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