National Living Wage Helps Boost Pay for Lowest U.K. Earners

  • Pay growth fastest at bottom end of earnings scale, ONS says
  • Gender pay gap for worst-off earners narrows most on record

The U.K.’s increased national minimum wage is showing signs of success.

The lowest-paid British workers had the strongest salary growth in the year running up to April 2016, the Office for National Statistics said Wednesday. That suggests the National Living Wage -- introduced in April 2015 by former Chancellor of the Exchequer George Osborne -- is having its intended effect. Its implementation pushed the base level of pay up to 7.20 pounds ($8.80) an hour from 6.70 pounds.

For full-time workers, the weekly wage of the lowest-paid bracket of employees was 6.2 percent higher in 2016 than the previous year, the statistics office said in a report. For the highest earners, salaries increased 2.5 percent in the same period.

The gender pay gap also narrowed for lower earners, posting the largest year-on-year decrease since records began. That’s also likely to be connected to the living wage as women tend to work in lower-paid occupations, the ONS said.

The figures cover the period before Britain’s June referendum on EU membership. Official statistics since then have showed that real wages are beginning to be squeezed by the plunge in the pound since the Brexit vote, which is starting to stoke inflation.

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