Rapid Rise In UK Living Wage Could Result In More Robots In The Workplace

A rapid increase in the UK 'living wage', a concept initially floated by former Chancellor George Osborne, could result in more jobs being replaced by robots over the medium term, according to a new report published on Thursday (4 January).

In its latest assessment of the jobs market dynamic, the Institute For Fiscal Studies said more jobs may be at risk of automation, with the country's hourly minimum wage rate set to rise above £8.50 per hour by 2020.

The think tank report's author Agnes Norris Keiller said: "Beyond some point a higher minimum wage must start affecting employment. We do not know where that point is.

"The fact there seemed to be a negligible employment impact of a minimum [wage] at £6.70 per hour - the 2015 rate - does not mean the same will be true of the rate of over £8.50 per hour that is set to apply in 2020."

The IFS report added that firms are increasingly likely to invest in automation via robots and computerised systems if the alternative is higher labour costs.

"The fact the higher minimum wage will increasingly affect jobs that appear to be more automatable is an additional reason why extremely careful monitoring is required," Keiller said further.

"Even higher rates, as proposed for example by the Labour Party, would bring even more employees in more automatable jobs into the minimum wage net."

Former c=Chancellor George Osborne, introduced the "National Living Wage" in his 2015 Budget, starting at £7.20 per hour for the over-25s, and it is tipped to rise to £9 per hour by 2020; a policy retained by his successor Philip Hammond.

It replaced the £6.50 per hour minimum wage.

The Labour Party, not to be outdone on living wage levels, has said that it would increase the wage rate to £10 per hour.

RECENT NEWS

When The Gate Comes Down

A Stress Test Rather Than a ScandalApollo Debt Solutions is not a blow-up story. It is something arguably more instructi... Read more

When Stability Becomes The Strategy

There is a particular kind of reckoning that arrives in your early fifties. You have been paying into a pension for deca... Read more

The Gates Close At Blackstone

There is a particular kind of silence that falls over a financial market when something that was quietly expected finall... Read more

From Cypherpunk To Citadel

How Crypto Moved from the Wild West to the Mainstream Financial SystemA long-form analysis of Bitcoin's journey from fri... Read more

Gyrostat May Market Outlook: When The Cost Of Protection Falls - Signals For Portfolio Positioning

This monthly Gyrostat Risk-Managed Market Outlook does not attempt to forecast market direction. It... Read more

War Risk Returns To Markets As VIX Surges

For most of the past year, global markets behaved as though geopolitical risk had largely disappeared. Inflation was eas... Read more