Anticipating and adjusting to the introduction of the National Minimum Wage in the hospitality and clothing industries

Lucas, Rosemary E. and Langlois, Michele (2003) Anticipating and adjusting to the introduction of the National Minimum Wage in the hospitality and clothing industries. Policy Studies, 24 (1). pp. 33-50. ISSN 1470-1006

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Abstract

The National Minimum Wage (NMW) has been a unique event, providing an exceptional opportunity to learn how firms manage change and adjust to a significant intervention in the labour market. This article discusses how hospitality and clothing firms managed the introduction of the NMW in the two-year period leading up to its arrival on 1 April 1999. Individual firms do have scope for discretionary, random and opportunistic decisions, and the introduction of the NMW is not a discrete event occurring in a stable world. Ultimately, its impact will be difficult to predict and to measure even though we can discern inter- and intra-industry differences, and along a small and larger firm divide. While the NMW is clearly an important dimension of public policy that has been successful in raising workers' pay, the level at which it is set will continue to pose conundrums to the policy makers in terms of dealing with firms' performance and competitiveness.