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The Introduction of a National Minimum Wage in the United Kingdom
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Journal Article
The Introduction of a National Minimum Wage in the United Kingdom
2016
Overview
This study analyzes the United Kingdom's experience in implementing a National Minimum Wage (NMW) and explores the lessons applicable to Egypt. The author explains that the introduction of the NMW in 1999 marked a major shift in UK labor market policy, aiming to protect low-income workers, reduce wage inequality, and promote social justice without harming economic growth or employment levels. The study reviews the stages of implementation, starting with the establishment of the Low Pay Commission (LPC), followed by the formulation of economic and social criteria for determining wage levels, and finally the long-term assessment of the policy's outcomes after more than two decades. Empirical evidence shows that the minimum wage improved living standards for around two million workers, particularly in the service, retail, and care sectors, while maintaining stable employment levels. In contrast, Egypt faces several challenges in applying an effective minimum wage policy, including weak compliance in the private sector, the large size of the informal economy, and the absence of an independent oversight body equivalent to the LPC. The study recommends establishing an independent national wage authority to review wage levels periodically based on inflation and productivity, while ensuring transparency and social dialogue among stakeholders. It also stresses the need to link the minimum wage to social protection and insurance policies to achieve broader welfare improvements. The author concludes that the UK model provides a balanced framework combining social protection and economic stability, and that implementing a similar system in Egypt requires strong institutions and political commitment to ensure fairness and sustainability. Abstract Written by Dar AlMandumh, 2025, Using AI.
Publisher
جامعة عين شمس - كلية التجارة
Subject
