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The hourly earnings distribution before and after the National minimum wage

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Article

Butcher, Tim

Labour Market Trends

2005

113

10

Oct.

427-435

income distribution ; minimum wage ; statistics ; wage rate

United Kingdom

Wages and wage payment systems

English

"The National Minimum Wage was introduced in April 1999. By October 2003, the adult minimum wage had increased by 25 per cent. This was considerably higher than the rate of price inflation.Between 1992 and 1997 the lowest paid percentiles of the hourly earnings distribution received wage increases that were below the wage increases at the median. Wage increases were greatest for those percentiles at the upper end of the earnings distribution. In contrast, between 1998 and 2003, a period that encompasses the introduction of the minimum wage and its initial upratings, the hourly earnings of the lowest paid percentiles increased by more than those at the median. At the upper end of the hourly earnings distribution, however, wage increases continued to be higher than those at the median. These findings are consistent across gender and hours of work, full-time and part-time. The comparisons use the New Earnings Survey, which is available for both time periods. For the latter period, 19982003, similar conclusions are drawn using the Annual Survey of Hours and Earnings."

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