Minimum wage hikes promised by Labour could lead to workers being replaced by robots, think-tanks warns
- The Institute for Fiscal Studies warned wage hikes could accelerate automation
- Jeremy Corbyn has promised a dramatic hike in the minimum wage to £10
- IFS said the minimum wage is already hitting low-skilled jobs at its current level
Labour‘s plans to increase the minimum wage to £10 an hour could see thousands of workers replaced by robots, a new report warns today.
The independent Institute for Fiscal Studies (IFS) warns that rapid increases in minimum pay rates could tempt employers in a range of sectors to accelerate plans for automation.
In the run-up to last year’s election, Jeremy Corbyn committed Labour to increasing the minimum wage to £10 an hour, saying it would ‘immediately boost the incomes and opportunities of more than 20 per cent of the workforce, especially in sectors such as retail, care and hospitality.’
But today’s report warns that rapid increases in the minimum wage are already putting jobs at risk – with Labour’s plans likely to worsen the problem.
The minimum wage, which was £6.70 an hour in 2015 is already on course to top £8.50 an hour by 2020. This would see the proportion of adult workers on the minimum wage treble from four per cent to 12 per cent over the same period.
Report author Agnes Norris Keillor said the existing minimum wage (now known as the national living wage) mainly covered jobs like care workers and waiters which are ‘not readily done by machines’.