National Minimum Wage

National Minimum Wage
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Table 2.10: Unemployment and Inactivity Rates, by Groups of Workers, UK, 1999-2011
(Rates: per cent;
changes: percentage
points)
Unemployment Inactivity
2011 Q3 Change on: 2011 Q3 Change on:
2010 Q3 2008 Q2 1999 Q1 2010 Q3 2008 Q2 1999 Q1
Working age 8.1 0.1 2.8 1.8 23.3 -0.1 0.2 -0.3
Men 8.8 -0.1 3.1 1.8 17.1 -0.1 0.8 1.5
Women 7.3 0.4 2.4 1.9 29.4 -0.1 -0.3 -2.0
16-17 year olds 37.8 4.1 11.7 17.8 62.5 0.8 8.6 22.5
18-20 year olds 24.9 1.5 8.9 10.3 38.2 1.5 5.7 9.9
Older workers (65+) 2.3 -0.3 0.5 -0.5 91.1 -0.5 -1.7 -3.8
White 7.4 0.0 2.5 1.4 22.1 0.2 0.3 -0.9
All ethnic minorities 13.4 0.3 2.8 0.1 31.0 -0.2 -1.3 -4.3
Black 17.1 -0.8 3.9 0.3 26.1 -2.1 -0.7 -1.9
Indian 8.3 -0.6 1.5 0.0 23.2 -1.4 -2.6 -7.2
Pakistani/Bangladeshi 16.3 -1.2 2.1 -4.4 41.3 -2.4 -5.2 -10.4
Other non-white 12.0 0.4 1.4 -1.1 32.8 0.7 0.6 -2.4
With qualifications 7.5 0.1 2.7 2.0 19.7 0.0 1.8 2.7
No qualifications 17.0 0.4 5.7 4.9 51.7 -0.2 4.3 10.7
Not disabled (16-59/64) 7.6 0.1 2.8 1.9 15.7 -0.1 0.3 0.5
Disabled people
(16-59/64)
14.6 0.0 2.8 1.6 51.7 -1.0 -2.6 -4.9
UK born 8.0 0.1 2.9 1.9 22.8 0.0 0.3 0.0
Non-UK born 9.0 -0.1 2.0 0.3 26.1 -0.7 -0.8 -5.7
Source: LPC estimates based on LFS Microdata, quarterly, four-quarter moving average, UK, Q2 1998-Q3 2011.
Note: Working age, unless otherwise stated.
Research on Employment, Hours and Unemployment
2.88 The majority of the research conducted on the impact of the minimum wage in the UK has
focused on its effect on employment or hours. Most of that research has analysed the impact
in a period of strong economic growth. The general consensus of the research is that the
NMW has not significantly affected employment. It is now nearly four years after the onset
of the deepest recession since the 1930s and the most recent research has continued to find
little evidence of significant adverse employment effects.
2.89 Researchers have generally taken four approaches in attempting to identify employment and
hours effects. First, aggregate time series data have been used to compare employment
effects across countries or industries over time. Second, researchers have used the national
nature of the minimum wage to look at differences in coverage and bite across geographies.
Third, individual data have been used to follow people over time or to compare minimum
wage workers with those higher up the earnings distribution. Fourth, case studies have been
used to explore the impact on individual firms.