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CentrePiece article
Minimum wages: the economics and the politics
Alan Manning
May 2014
Paper No' CEPCP419:
Full Paper (pdf)

CentrePiece 19 (1) Spring 2014

JEL Classification: J31;J38; J41

Tags: national minimum wage; employment; living wage; politics; public policy

The UK’s national minimum wage has tackled extreme low pay – but the wider problem of low pay remains as serious as ever. That is one of the conclusions of Professor Alan Manning in a discussion of the growing popularity of minimum wages as a way of tackling inequality – and the likelihood that it will lead to minimum wages that are much higher than we have seen before in some parts of the world. He notes that the driving force behind higher minimum wages is that they are very popular with voters – but even most economists now agree that they have little or no negative effect on employment. Big increases in minimum wages will test the view that negative effects on employment must eventually kick in.