When the minimum wage was introduced in the United Kingdom on April 1, 1999, exactly twenty-five years ago, the subject provoked heated debate. Up to 2 million people were at risk of losing their jobs, according to cataclysmic predictions by Michael Howard, Conservative Labor Minister from 1990 to 1992. The Grocers’ Federation threatened to be forced to lay off half of its employees. “The Labor Party wants to remove the ladder of opportunity that so many people want to climb”, criticized John Redwood, a Conservative MP. Economists themselves were very divided.
A quarter of a century later, it is “the most successful economic policy in a generation”, estimates the Resolution Foundation, a British think tank. Not only has unemployment not increased at all (it is currently 3.9% in the United Kingdom), but the measure is now the subject of political consensus.
Initially introduced at a very low level of 3.60 pounds per hour, or 47% of the median wage at the time, it increased by 10% this Monday, April 1, to reach 11.40 pounds per hour, or two thirds of the median salary. This hourly minimum wage, equivalent to 13.40 euros, now clearly exceeds the French minimum wage, which is 11.65 euros. Better yet, there is no “smicardization” of society. Only 5% of employees are paid this minimum, far from the 17% in France. “There were concerns, including in my party, but they were unfounded”recognizes today Kevin Hollinrake, Secretary of State for Business.
One of the explanations for this success is due to the prudence which governed the entry into force of the measure. Faced with the heated debates on the subject, to say the least, Tony Blair’s government not only set the minimum wage at a very low level (only 2% of employees were concerned initially), but it also created an independent commission, made up of experts from unions, employers and academics, responsible for determining its amount each year.
Political reversal
“It is an excellent example of social dialogue, and this is what gave us the confidence necessary to support the creation of the minimum wage”, estimates Rain Newton-Smith, director of the Confederation of British Industry, the main employers’ organization, which, initially, had been hostile to its creation. Another sign of caution: the minimum wage is lower among the youngest, with a lower floor for those under 18, another for those aged 18-20 and a third above 21 (initially set at 23). ).
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