Tory Living Wage Sending ‘Shockwaves’ Through Economy, Prices to Rise, Unemployment to Follow

living wage migrants

Britain’s jobs market is at its least optimistic for three years due to “shockwaves” caused by Chancellor George Osborne’s national living wage, a new report has said.

Employment firm Manpower surveyed 2,100 employers, finding that many were scaling back plans to recruit new staff, blaming the £7.20-an-hour “living wage” announced in July’s budget.

The policy was hailed by some Conservatives at the time for wrong-footing the Labour opposition by outflanking them on the left.

Work and Pensions Secretary Iain Duncan Smith even enthusiastically fist pumped in the House of Commons chamber when the policy was announced.


Work and Pensions Secretary Iain Duncan Smith cheers the living wage policy

Now, however, James Hick of ManpowerGroup Solutions UK said British employers were worried about the impact, and that young people could be especially hard hit.

“The national living wage is sending shockwaves through the UK labour market,” he said.

“An unintended consequence of the introduction of the new living wage is that firms might try to bypass the legislation altogether.

“We anticipate that some employers may look to mitigate the extra costs by taking on more younger or self-employed workers, who are not entitled to the national living wage.

“While on the surface this could be good news for youth unemployment, which currently stands at 16 per cent, it could push a greater proportion of young people into low skilled jobs, resulting in an influx of less experienced workers into social care and other sectors hardest hit by the new legislation.

“Meanwhile, candidates under the age of 25 have been asking us why it is they will be paid less despite doing equal work.”

The report also said that the government’s so-called “Northern Powerhouse” project to improve the economy of northern England had so far “failed to ignite” interest.

Breitbart London has previously reported that right-of-centre think tanks had described the move as a “disaster”, while supermarket chain ASDA warned of price rises, and Prime Minister David Cameron threatened to enforce with small-business-busting fines.

PA contributed to this report