Effective April 1, 2023, there will be a hike in the UK's National Living Wage (NLW). The NLW will rise to 10.40 from the present 9.50, leading to an increase of 9.7 percent. The decision to increase the National Living Wage follows the Low Pay Commission's recommendation to revise the minimum wage for employees over 23 years.

Higher National Living Wage to streamline the economy.

Higher National Living Wage to streamline the economy.

The recommendations of the Low Pay Commission aim to ensure that the government achieves a target of 66 percent of median earnings by 2024. The target of a median wage makes it easier for employers to prepare for the future rise in the National Living Wage. The significant rise in the National Living Wage coincides with the mounting burden of steep costs of living on low-paid employees. Given the tight labour market in the UK and the record number of vacancies due to the unprecedented labour shortage, raising the National Living Wage makes sense. These factors will enable the nation's economy to adjust to the rise in the National Living Wage.

Widening gap between private and public sector pay

Widening gap between private and public sector pay

During the last quarter, the average growth of the private sector's regular pay was 4.4 percent higher than the public sector. Public sectors pay increased by 2.2 percent, while private sectors pay increased by 6.6 percent. It marks the biggest difference between private and public sector pay. The growing gap is causing difficulties in recruitment for the public sector. It also presents challenges for the retention of public sector staff. Unemployment has been at its lowest rate in the past fifty years. Meanwhile, wage growth in the private sector is boosting employment and helping the private sector. Albeit, post Brexit we are not in a like for like marketplace.

Impact of the National Living Wage

Impact of the National Living Wage

The aim of introducing the National Wage Review in 2015 was to mitigate pay gaps between genders and ethnicities besides addressing the regional pay imbalance. These are some insights about NLW's impact on employees and the UK's job market: Employment - There was no noticeable impact on the employment rate, though the National Living Wage helped minimize the pay imbalance between regions. There was no job growth in lower-paying companies. Productivity- There was no effect on productivity growth besides yearly growth in the National Living Wage.

Living standards - Income growth did not improve living standards.

Living standards - Income growth did not improve living standards.

Job change- Employees who would otherwise have changed jobs for better pay were able to get better pay with the same employer through the National Living Wage increase. Pay gaps- The National Living Wage reduced pay gaps between men and women as the rise in NLW benefitted more women than men. It also helped close the pay gaps among ethnicities.

The takeaway

The takeaway

The remarkable growth in the National Living Wage will boost low-paid workers, who are suffering the most because of the steep inflation that we are all grappling with. The decision to implement the National Living Wage of 10.42 underlines the government's resolve to help low-income employees. Low-paid employees need the assurance of a better living wage because of the approaching winter and rising inflation. The positive side of the story is that over 11,000 UK employers pay real living wages to all employees, including contractors.

Despite all we have said, the rates of the National Living Wage are still low compared with the Real Living Wage. The real living wage represents the actual cost of living in the UK. The real Living Wage in the UK is 10.90, while it is 11.95 in the London. Employers who pay a living wage help employees enjoy better living standards besides managing the rising cost of living. Paying Living Wages to employees is crucial for a robust economy and higher productivity which is why beyond any prescribed initial supported training schemes paying at least the living wage has long been our policy at RISSS - we are Ringley Integrated Site Staff Solutions and provide personnel opponent down the country for lease up, for housekeeping, concierge and security as well.as managers on site.and off.