National Minimum Wage

National Minimum Wage
52
firms (employing 11-49 workers). The remaining 53 per cent were roughly split between
medium-sized (employing 50-249) and large firms (employing more than 250).
2.80 Figure 2.17 shows that employment growth has varied by size of firm over time. Large and
other small firms were most affected during the recession, while employment in micro firms
increased slightly. Having been most severely affected by the recession, other small firms
had the strongest recovery from the end of the recession to the third quarter of 2010, but
have seen the largest reduction in employees since then. In contrast the number of
employees in micro firms decreased between the end of the recession and the third quarter
of 2010, but has increased again since.
Figure 2.17: Change in Employment, by Firm Size, UK, 2006-2011
Change in the number of employees (per cent)
4
3
2
1
0
-1
-2
-3
-4
Q2 2006-Q1 2008
Q1 2008-Q2 2009
Period
All Micro Other small
Q2 2009-Q3 2010
Medium
Source: LPC estimates based on LFS Microdata, quarterly, not seasonally adjusted, UK, Q2 2006-Q3 2011.
Q3 2010-Q3 2011
2.81 Many of the groups of workers that were expected to be most affected by the minimum
wage have experienced increases in their employment rates since its introduction in April
1999. Table 2.9 shows that women, older workers, ethnic minorities, disabled people and
migrants all have employment rates that are lower than the average. But all of these groups
saw their employment rates increase between the first quarter of 1999 and the third quarter
of 2011. However, over this period, the employment rates of young workers and those with
no qualifications fell markedly. Moreoever, for young workers this fall may have been
exacerbated by some young people remaining in education in order to avoid unemployment
(see Chapter 3 below).
2.82 The same groups of workers also generally fared better than average since the beginning of
the recession. It is young people and those with no qualifications that have been most
adversely affected. It is a similar story over the past year although women and ethnic
Large
4
3
2
1
0
-1
-2
-3
-4