How English care homes have coped with the National Living Wage

Giulia Giupponi 150Giulia Giupponi is an ESRC-funded PhD student at the London School of Economics and a research assistant at the Centre for Economic Performance.

Steve Machin 150Stephen Machin is Professor of Economics at the London School of Economics and Director of the Centre for Economic Performance.

They have been advising the Low Pay Commission on the impact of the National Living Wage on English care homes.

On 1 April, all five UK minimum wage rates were increased (PDF), a year on from introduction of the National Living Wage (NLW) for workers aged 25 and over with a rate of £7.20 an hour. Rates for younger workers remained at the level of the existing National Minimum Wage (NMW). The NLW is set to achieve the 2020 target of 60 per cent of median earnings. Given the scale of the change – a 7.5 per cent increase at the time of the NLW introduction (PDF) – and the ambitious target set for 2020, a natural question is the impact on employment and other margins of adjustment by firms. Continue reading