Photographer: Chris Ratcliffe/Bloomberg

Minimum Wage Boost Lifts 300,000 Britons Out of Poverty

  • Resolution Foundation finds new minimum wage boosted salaries
  • But too many workers are clustered at bottom of the pay scale

The number of Britons in low-paid jobs dropped by more than 300,000 last year, the biggest reduction since 1977, thanks to the introduction of a new minimum wage.

The share of employees earning less than two-thirds of the median hourly wage in the U.K. has fallen below one-in-five, the Resolution Foundation think tank said in a report published Thursday. The proportion among women has fallen below one-in-four for the first time since records began, although they still make up the majority of people in low-paid work.

The National Living Wage, which saw minimum pay rise by 7.5 percent when it came into force in April 2016, helped boost salaries, including those of young people who are not legally covered by it, the report found. Even so, a growing number of workers are now clustered around that level, currently 7.50 pounds ($9.90) an hour, and face reduced incentives and opportunities to progress onto better paid positions, it said.

Overall pay growth in the U.K. remained largely tepid in 2016, a situation brought into sharper focus by the acceleration in inflation since the Brexit vote. Still, Bank of England policy makers have highlighted nascent signs of stronger growth, bolstering the case for them to boost interest rates for the first time in a decade, possibly as soon as next month.

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