National living wage introduced in Britain

The national living wage (NLW) came into operation Friday in Britain in a move being watched by other countries seeking policy solutions to low pay.

The NLW is a higher minimum wage for workers aged 25 and above. This will start at 7.2 pounds per hour (about 10.2 U.S. dollars), which equals 55 percent of the typical (median) hourly pay of those aged 25 and over.

The government announced the measure in its summer budget of 2015 and also declared the ambition for the NLW to rise to 60 percent of median hourly pay by 2020.

The move will increase the national wage bill by 4.5 billion pounds, a 0.5 percent increase.

About 4.5 million workers will benefit this year, with a further 1.5 million benefiting by 2020, which is 23 percent of the national workforce.

Of the 6 million workers who will benefit, about 3.2 million workers are expected to see their wage packets brought up to the NLW, according to figures from the London-based economics think-tank Resolution Foundation.

A further 2.8 million workers who already earn more than the NLW are likely to see their wages rise as employers seek to maintain pay differentials between workers.

Workers affected can expect an annual pay rise of 1,210 pounds on average.

About 46 percent of those affected work in three industries: retail, hospitality and admin and support services. Nearly half the total workforce in the hospitality industry will benefit.

The Resolution Foundation contributed to the research leading to the NLW, and was cited by British Finance Minister George Osborne when he announced the policy.

Torsten Bell, director of the Resolution Foundation, said: "Today's national living wage introduction means a welcome pay rise for over 4 million low-paid people this year, with women and part-time workers most likely to benefit."

Bell added: "That's hugely good news on the back of the biggest squeeze on living standards on record." Endit