The impact of COVID-19 pushed many below the NMW

The Resolution Foundation’s Low Pay Britain 2020 report shows that as early as April 2020, average weekly earnings fell in cash terms for the first time this century due to furlough and the wider economic impact of the COVID-19 pandemic. Data over the summer suggested a return to weak growth across most sectors. However, that pay growth, at least partially, reflects the fact that low-paid workers have been more likely to lose their job, leaving the average employee higher paid.

In addition to being more likely to lose their jobs, low-paid workers have also been more likely to be furloughed (with accompanying pay cuts for many) and to lose hours. This is not a phenomenon limited to the minimum wage. Low-paid workers paid above the wage floor, but below the Real Living Wage, have been similarly affected. This puts low-paid workers at particular risk of future job losses as government support is withdrawn after lockdown ends. It has also pushed the number of workers paid less than NMW to over two million.