Weighing up the wage floor: Employer responses to the National Living Wage

Published on Work & Security

The findings of this report confirm that a significant share of firms will not be affected by the National Living Wage (NLW), or will face only a small increase in their wage bill. At the same time, it is clear that for some employers, particularly those in low-paying sectors, the NLW will raise their labour costs considerably. Both the survey and the case study interviews show that, for most employers, cuts to employment levels are seen as either undesirable or impossible. The emphasis from many is on improving productivity. Yet employer interviews suggest that delivering these productivity gains will prove challenging.