The Observer spoke to several sources, who confirmed that that Hammond is looking into increasing the wage floor to 66% of median earnings – the Organisation for Economic Cooperation and Development’s definition of low pay.
If this policy is pursued, the National Minimum Wage would be £9.61 per hour in 2020, trailing just behind Labour’s proposal of £10 per hour.
The Living Wage Foundation, which calculates the rate workers need to cover their living costs, recommends £9 per hour for workers outside of London and £10.55 within the capital city.
According to the Guardian, the Treasury has commissioned US academic Arin Dube to conduct research into the impact of a significant increase in the National Minimum Wage. Dube has previously found that wage raises do not lead to substantial job losses.
With in-work poverty now at record levels, the Institute of Employment Rights welcomes this recognition that wages need to be improved, but recommends that a progressive government go further to ensure financial security for people across the UK.
In our Manifesto for Labour Law, we propose increasing the wage floor to the level of the Real Living Wage alongside reinstating sectoral collective bargaining across the economy. This would provide workers with the opportunity to negotiate suitable pay and working conditions for their time and skills.