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Over 30 delegates from eight Member States and International bodies attended a two-day Peer Review on the UK’s National Minimum Wage in London on 7 – 8 April.
Representatives from national ministries and independent experts from Belgium, Germany, Greece, Ireland, Italy, Latvia, the Netherlands and Norway as well as the European Commission, Eurofound and the International Labour Office learned how the UK had introduced the National Minimum Wage in 1999.
At first the UK National Minimum Wage provoked controversy but since its introduction, the principle is now politically unchallenged. The UK approach focuses on setting a wage floor in the context of other tax and benefit provisions, unlike some other European countries where the emphasis is on providing a ‘living wage’.
Delegates heard about the success factors in the UK context. These include having a strong legal framework, undertaking widespread consultation with social partners and stakeholders, proceeding from setting the minimum wage at a cautious level and making it as simple as possible for employers. This was strengthened by an evidence-based approach and an independent body responsible for considering developments in the Minimum Wage on an annual basis.
The event also highlighted the challenges, which included obtaining reliable pay data, the potential impact of minimum wage setting on workers earning just above the minimum and those on the margin of the labour market. In addition, ensuring compliance with the National Minimum Wage can become more challenging in weaker economic conditions.
The debate contributed to EU discussions on the monitoring of wage developments in the context of the achievement of ambitious employment targets.