Designing and implementing the UK’s National Minimum Wage

This year marks 20 years since the passage of the National Minimum Wage Act – a politically controversial intervention in the British labour market at the time. Professor William Brown was centrally involved as a member of the Low Pay Commission in designing and implementing the ‘most successful policy of the past 30 years’1.

Professor William Brown

The impact of the National Minimum Wage on the UK labour market is hard to ignore. By 2007, 10 years after the Low Pay Commission was formed, it had raised the pay of around 10% of the workforce by an average of 20%.2 The Low Pay Commission has always prized its independence from government, coupled with rigorous research and evidence-based recommendations. But its prospects were initially poor. The concept of a National Minimum Wage was politically controversial at the time and in practical terms the Wage was difficult to design, negotiate and enforce.

In 1997, Tony Blair’s government came to power with a mandate to implement a National Minimum Wage. To do this, the Low Pay Commission was established rapidly. Part of its job was to gather evidence showing where low wages were a problem and how low they were. Existing wage statistics were poor and the potential implications of a Minimum Wage for job losses were considerable. They needed to produce a definition that could be clearly enacted into law and subsequently be enforced. All this had to be acceptable to employers, trade unions and government.

Professor Brown was appointed as an independent member of the original Low Pay Commission in 1997. He served until 2007 and the influence of his research on the Low Pay Commission continues to the present day. Professor Brown’s appointment was a recognition of his substantial range of workplace-based research that gave him an understanding of the complexity of the problem. Pay is more difficult to measure than it may appear on the surface. Accounting for messy details like bonuses, tips and shift patterns presents difficult challenges. Professor Brown’s substantial experience as an industrial arbitrator played a part in winning wider acceptance of the definitions and procedures of the National Minimum Wage. Regular consultation visits all over the country were necessary to appreciate its unfolding consequences for both low payers and low paid.

The Low Pay Commission today has a legacy of rigorous research, solid data and academic integrity, due in no small part of Professor Brown’s involvement. His paper on ‘The process of fixing the British National Minimum Wage’ forms a central part of the induction reading given to all Low Pay Commissioners and new members of the Commission’s Secretariat. He was involved in designing the programme of research that over the first decade enabled the Commission to assess the likely and actual impact of changes in the National Minimum Wage on employment, pay and productivity. The first Chair of the Low Pay Commission said that “Professor Brown’s published research since 1993 has made a significant contribution to the continuing success of the British National Minimum Wage since 2008.”

1 In 2011, the National Minimum Wage was judged to be ‘the most successful policy of the past 30 years’ in a poll of members of the Political Studies Association conducted with the Institute for Government

Brown, W. A. (2009). ‘The Process of Fixing the British National Minimum Wage, 1997 – 2007’. British Journal of Industrial Relations, 47 (2): 429-443

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