One third of workers in some parts of the UK will benefit from a pay increase when the National Living Wage (NLW) is brought in this week.
Analysis by the Resolution Foundation of the impact of the NLW across Britain identified a number of ‘hotspots’, where the introduction of the £7.20 minimum wage for workers aged 25 and over will benefit the most people.
The leading NLW hotspot is Torridge in Devon, where 35 per cent of workers are set to get a pay increase. This is almost double Britain’s average of 18 per cent, and equates to a total pay boost of around £2 million for the area.
Other hotspots include:
- Rossendale in Lancashire, where 33 per cent of workers will benefit
- Woking in Surrey, where the NLW will mean a pay boost for 32 per cent of workers
- Castle Point in Essex, where 32 per cent of employees are set to gain
Joining these places in the top 10 are Oadby and Wigston (Leicestershire), Forest Heath (Suffolk), Mansfield (Derbyshire), West Somerset, Breckland (Norfolk) and Rother in Kent.
The impact in areas in the UK – particularly in the south east – is less marked.
In the City of London, just 3 per cent of workers will get a pay increase as a result of the NLW, closely followed by Camden and Tower Hamlets (both 6 per cent) and Southwark and South Cambridgeshire (7 per cent each).
Of the major cities across Britain, Sheffield workers will reap the greatest benefit, with 22 per cent of employees set to see a step-up in pay.
£9 minimum to benefit 6 million
For the whole of the UK, around one in six workers – some 4.5 million people – will benefit from the NLW this year. This is set to rise to 6 million employees in 2020 if the £9 per hour minimum wage, which the Foundation has been pressing for, is introduced by then.
Torsten Bell, director of the Resolution Foundation, said: “The National Living Wage is a hugely ambitious policy with the potential to transform Britain’s low pay landscape.
“Britain’s new legal wage floor will be felt throughout the country, but… relatively few employees will benefit in high-paying parts of Britain, reminding us of the need to see more employers sign up to pay the higher voluntary Living Wage.
“Of course pay rises don’t come free so employers in some sectors and parts of the country will feel the pressure more than others. That’s why it’s vital that businesses and national, regional and local government make the successful implementation of the new legal minimum a priority.”