Minimum Wage Raised to 18,600 Won Amid Soaring Prices... UK Government Estimates 2.7 Million Beneficiaries

UK to Raise Minimum Wage to ?11.44 Starting April Next Year

The UK's minimum hourly wage will increase to ?11.44 (approximately 18,656 KRW) from April next year, rising by more than ?1 (about 1,630 KRW) compared to this year. As a result, the lower-income class is expected to receive significant benefits.

According to local media such as the BBC, Jeremy Hunt, the UK Chancellor of the Exchequer, announced that the UK's minimum wage system, known as the 'National Living Wage,' will be raised from ?10.42 this year to ?11.44 next year.

Supermarket in the UK
[Image source=EPA Yonhap News]

Additionally, the eligibility for the living wage will be expanded from those aged 23 and over to those aged 21 and over. Currently, the minimum wage for 21-22-year-olds is ?10.18 per hour, and this group is expected to see a larger wage increase next year. Unlike the domestic minimum wage, the UK's living wage system applies different rates based on age.

Thus, full-time workers aged 23 and over will see an annual salary increase of ?1,800 (approximately 2.93 million KRW), while those aged 21-22 will benefit from an annual increase of ?2,300 (approximately 3.75 million KRW).

The minimum wage for 18-20-year-olds will rise from ?7.49 (about 12,214 KRW) to ?8.60 (about 14,024 KRW) per hour, and the apprentice wage will increase from ?5.28 (about 8,610 KRW) to ?6.40 (about 10,436 KRW) per hour. These groups will experience roughly a 20% wage increase.

The UK Treasury emphasized that this increase in the living wage is the third largest in real terms since the introduction of the system, considering inflation. In nominal terms, it is the largest increase to date.

The UK introduced the living wage in 2016. This increase follows the recommendation of the Low Pay Commission to fulfill the ruling Conservative Party's pledge to raise the minimum wage to two-thirds of the median wage by October next year.

The sharp rise in wages is related to the overall wage growth of UK workers. UK workers' wages have been rising steeply to keep up with soaring inflation.

According to the UK Office for National Statistics, the nominal wage growth rate in the third quarter (July-September) was 7.7%. This exceeded the Consumer Price Index (CPI) of 6.7% during the same period by 1%, making the UK one of the few advanced countries where real wages are currently recovering.

As nominal wages for general workers have risen sharply, the median wage, which serves as the basis for the living wage, has also increased, necessitating a significant rise in the living wage accordingly.

The UK government estimates that about 2.7 million workers will directly benefit from this measure.