This in-depth study looks for the first time at the possible options for applying a maximum wage cap and the benefits it could create for lower and middle income earners.
Britain operates a starkly unequal labour market (the 9th most unequal in the OECD), and the Covid pandemic is revealing its true extent. As the UK economy buckles and growth crawls to a halt, the government – and business leaders – need to consider mechanisms by which existing cash in the labour market can be more equally distributed, so as to save livelihoods and industries. Wage caps are a powerful instrument to do this.
We believe the report carries out unprecedented estimations of the earnings of the top percentiles of salaried, full-time employees, based on available data. This represents a new step forward for economic modelling in this area.
As firms of all kinds from a variety of sectors plan and carry out layoffs at scale, we ask the question: ‘are these cuts to jobs necessary?’
And as the government suggests that it will not follow through with its 2019 election promise of a £10.50 per hour minimum wage, we ask the question: ‘Can we afford to raise the minimum wage?’