OVER half a million workers in Yorkshire are set to benefit from the new National Living Wage, which will result in an average pay rise of over £700 per person a year by 2020.
Over 25 per cent of Yorkshire workers are set to benefit from the new measure, which was announced in July’s Budget, according to research by independent think-tank the Resolution Foundation.
It estimated that the wage bill across the region will rise by £450m as a result of the new measures.
In towns and cities in West Yorkshire, including Bradford, Calderdale, Kirklees, Leeds and Wakefield, one in four (26 per cent) of workers are set to receive a pay rise by the end of the decade. Around 240,000 employees are set to get an average pay rise of £740.
In the Sheffield city region, which includes Barnsley, Doncaster, Rotherham and Sheffield, 140,000 workers are set to benefit with three in ten employees (28 per cent) set to get an average pay rise of £770.
The new measure is set to lift the pay floor for workers aged 25 and over from April 2016 onwards.
It will initially be set at £7.20, 50p above the National Minimum Wage which will be £6.70 from October 2015, and will rise to an expected value of around £9.35 by 2020.
Across Yorkshire, 580,000 workers are set to benefit from the new National Living Wage (320,000 directly, and a further 260,000 indirectly).
Across Britain, the Foundation estimates that six million people, around 23 per cent of all employees, will receive some form of pay rise by the end of the decade as a result of the policy.
Women are expected to account for 3.7 million of those receiving a pay rise – representing 61 per cent of the total and nearly three in ten of all female employees – because of their higher concentration among the low paid.
A lower proportion of male employees will gain, with 2.3 million (18 per cent) expected to see their earnings boosted.
The Foundation estimates that the distribution of gains will contribute to a modest narrowing of the gender pay gap over the coming years.
The Foundation said that implementing the National Living Wage is expected to pose a significant challenge to several lower-paying industries.
Conor D’Arcy, policy analyst at the Resolution Foundation, said: “The National Living Wage will be a much needed top-up to the wages of over a half a million workers across Yorkshire and the Humber as a whole.
“The majority of those gaining from the new higher wage floor will be women as they are more likely to be low paid. The National Living Wage will particularly benefit those working part-time.
“With typical wages still only at their 2004 level in real terms, the case for boosting the wages of these workers is strong. However, with the level of the National Living Wage set to increase quickly over the next few years, we are moving into uncharted territory.”
He said the impact of the National Living Wage will be far greater in Yorkshire and the Humber than in many other parts of Britain.
“This means while the gains for workers will be greater, so too will be the challenge of implementing it for employers,” he said.
In West Yorkshire 130,000 workers are expected to be earning less than the National Living Wage and will gain directly by having their pay lifted. In the Sheffield City Region, 80,000 employees are expected to be earning less than the National Living Wage.
The average annual cash gain for these people will be £1,180 to £1,200, although it will be far higher for those working full-time who are currently on the minimum wage.
The Foundation estimates that a further 110,000 employees in West Yorkshire and 60,000 employees in the Sheffield area who already earn at or above the National Living Wage will also benefit from a ripple effect, as employers aim to maintain pay gaps between different workers. The average cash gain for these employees will be £240 to £260 by 2020.