In this essay I will explain the impact of the new National Living Wage on the national labour market and the economy. Companies will be required to pay a minimum of £9 an hour by 2020; the first step of the increase in wages will be introduced in April 2016, where workers will receive £7.20 an hour. From April 2016 the government will be implementing the National Living wage in order to help increase wages, lower tax and lower welfare society. By the end of this essay I aim to explain why and how the NLW (national living wage) affects the labour market.
The labour market is the demand and the supply of labour, in this market demand is the firm’s demand for labour, whereas the supply of labour is the worker supplying the labour. The labour market is made up of two sectors these are; number of people employed and people unemployed. Since the implementation of the national living wage …show more content…
There are various outcomes that can arises form the introduction of the national living wage but majority of outcomes will benefit the economy and the labour market. Psychologically it has been proven that employees work more productive when they receive a pay rise. The national living wage will affect the labour market dramatically in the long run because the economy will see an increase in employment and an increase in real GDP, which will then help increase economic welfare. The National Living Wage could be a milestone for the UK economy if all predictions made by the chancellor George Osborne comes to reality. In conclusion we will see a change in the labour market, we will slowly see an increase in employment and a decrease in frictional unemployment, however we will see more completion within the work force. Some may argue that the current wage rate is currently working for the UK labour market. Will the benefits of the implementation of the National Living Wage out weigh negative
The labour market is the demand and the supply of labour, in this market demand is the firm’s demand for labour, whereas the supply of labour is the worker supplying the labour. The labour market is made up of two sectors these are; number of people employed and people unemployed. Since the implementation of the national living wage …show more content…
There are various outcomes that can arises form the introduction of the national living wage but majority of outcomes will benefit the economy and the labour market. Psychologically it has been proven that employees work more productive when they receive a pay rise. The national living wage will affect the labour market dramatically in the long run because the economy will see an increase in employment and an increase in real GDP, which will then help increase economic welfare. The National Living Wage could be a milestone for the UK economy if all predictions made by the chancellor George Osborne comes to reality. In conclusion we will see a change in the labour market, we will slowly see an increase in employment and a decrease in frictional unemployment, however we will see more completion within the work force. Some may argue that the current wage rate is currently working for the UK labour market. Will the benefits of the implementation of the National Living Wage out weigh negative