From the TUC

National Minimum Wage – increase more likely than freeze

03 Apr 2013, by in Labour market

There have been rumours that the Government may freeze the NMW this year. I find them very hard to credit. Whilst it is certain that some employers’ organisitions like the British Chambers of Commerce and the usual right-wing think thanks will have lobbied for a freeze, as they have done for a number of years, the politics and economics of such a course simply do not add up.

The economics are that the UK is currently demand-deficient, and there is no credible evidence that the current rates are holding back job creation*, so freezing wages would make no sense at all. The politics are simply that the local election campaign is just about to begin, and any shrewd politicean would not think it wise to open the campaign with bad news. Therefore i expect an increase to be announced shortly.

*Actually, last year employment grew faster in the industries with a high incidence of NMW jobs than in the general economy – a sure sign that the rates are not damaging employment.