Category Archives: UK Labour Market

A Subtle Transfer of Value

A £15 billion reduction in benefits bills is a significant transfer from the unemployed to taxpayers. Benefits reform may drive claimants into the jobs market and therefore reduce wages for people already working in low skilled jobs. Whilst the minimum wage prevents labour rates falling beyond a certain level increased competition does mean that more jobs become minimum wage jobs. The transfer to the middle classes is, therefore twofold, a transfer from not paying the benefits bill for those not working and a reduction in wages for those working in low skilled jobs. Continue reading

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