The debate concerning the stabilization of the wage level is dominant among developed nations to sustain the per capita growth. However, the strategies set forth may not favor the economic parties in the corporate sector or may result to above shortcomings that may generate national concerns. This excerpt is a critical review of the research report concerning the Tory Welfare Cuts, which has been noted by scholars that it will destroy the benefit of a living wage.
The struggle to raise the average hourly pay for the United Kingdom workers is a long-term strategy for the government through the contribution of other stakeholders. The decision by the Gorge Osborne to raise the hourly pay by 50% has been associated with the living wage benefit shortcomings (Stewart, 2015). Through research, the move by the chancellor to announce the increase the pay level has been associated with the insignificant impact on living conditions. The changes have been noted to increase expenditure for retailers and small-scale business operators, which reduces the profit margin. The move has also been linked to the lack of the capacity to cater for the change in welfare cut associated with the move. The research further explained that the increase in the minimum wage would lead to little job creation rates as well as some individuals losing their employment. According to the results of the study, economists have argued that the targeted minimum wage by 2020 did not involve the consultation of the stakeholder diversity (Stewart, 2015). Besides, it has been noted to be the responsibility of the Low Pay Commission, which is an independent body. The study also predicted that the number of those living below the minimum wage in the United Kingdom would increase contrary to the expected impact of the increased pay.
Nevertheless, a critical evaluation of the move by the chancellor shows contrary possibilities to the research findings. Raising the minimum wage level was accompanied by a tax reduction. The move means that the cost of production and operation for many organizations will reduce due to levied charges thereby catering for the increased cost of labor. The purchasing power of the United Kingdom citizens will increase significantly by elevating the minimum pay. Such an occurrence will enhance the market potential for retail and small business a notion that the research negated. The growing market demand because of the capacity to afford goods and services will also make firms increase their human resource capacity to assist in more production to cater for demand. The shift will lead to more jobs as opposed to research results since the total output in the country will increase to accommodate the huge market demands. However, the chancellor could have made succinct consolations with diverse stakeholders and commissions before making the move public to encourage the independence of constitutionalized bodies.
In conclusion, the move to increase the minimum wage for the United Kingdom workers is an essential strategy that will strengthen the economy and alleviate poverty if it is strategically planned and implemented. The study did not consider the multidimensional approach to the announcement made by the Chancellor, which explains why the results of the survey were skewed. A critical evaluation of the long-term impact of the move is associated with significant benefits for the country and investors.
Stewart, H., 2015. Troy welfare cut will destroy benefit of the new living wage, research shows. Retrieved October 2015, from The Guardian: http://theguardian.com/society/2015/sep/26/national-livingwage-osborne-cuts-poverty
Cite this page
Economics Essay Sample: Tory Welfare Cuts Will Destroy Benefit of Living Wage. (2019, Oct 11). Retrieved from https://speedypaper.net/essays/tory-welfare-cuts-will-destroy-benefit-of-living-wage
If you are the original author of this essay and no longer wish to have it published on the SpeedyPaper website, please click below to request its removal:
- Does Wal-Mart Help or Hurt Local Economies
- Economics Paper Example: Microeconomic Reasons for Government Involvement
- The Role of Enterprise Bargaining In the Australian Employment System
- Free Essay: A Case Study of Samsung Employees' Relations
- Best and Worst Jobs
- Organizational Structures Essay
- In designing the compensation scheme