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Review of the UK economy in 2023

FISCAL POLICY

Minimum wages in the UK

How high can they go?

The UK government has pledged to support people on low incomes so that they do not suffer extreme hardship. In recent years, one of the ways in which it has done this has been by increasing the national minimum wage. Sam Ray-Chaudhuri explains

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In the UK today, earnings inequality is substantially higher than it used to be. Weekly earnings for a worker at the tenth earnings percentile, meaning someone who earns less than 90% of workers, rose by around 70% between 1980 and 2019.

By contrast, weekly earnings for a worker at the ninetieth earnings percentile (meaning someone who earns more than 90% of workers) rose by more than 100% during the same period. At the same time, a growing proportion of people in poverty in the UK are in a household with someone in paid work. This suggests that simply being in work may not be enough to guarantee that a family has enough income to live on.

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Previous

The digital dilemma

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Review of the UK economy in 2023