National living wage fears over jobs unfounded, says thinktank

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The national living wage has not been the "jobs killer" that many predicted, according to a report published today by the Resolution Foundation. The thinktank's survey of 500 employers, carried out before the EU referendum, found that only 6% felt the arrival of the new national minimum rate of £7.20 had had a large effect. Just over one-third (35%) reported a rise in their wage bill, but have responded by pushing up prices or taking lower profits. Of those organisations where payroll increased, 21% said this was by a small extent, 8% to some extent and 6% to a large extent. The report looks at the ways employers have dealt with the wage rise since it was introduced three months ago, and while most have passed on the cost to customers (36%) or taken lower profits (29%), other responses included:

• asking workers to do more (16%);
• investing more in training (15%);
• using less labour (14%); and
• investing more in technology (12%).

The survey found that – contrary to many predictions before the national living wage was introduced – only 8% of employers have scaled back other aspects of their reward packages, and only 8% hired more workers aged under 25 (the rate only applies to those aged 25 and over). The Resolution Foundation does point out, however, that the rec