Economists say workers in UK’s shadow economy risk missing out on pay increases from recent £7.20 an hour national living wage
Middle-lesson households that rely on cash-in-hand cleaners,gardeners and car washers are among the employers deemed most likely to try to avoid paying the increased minimum wage, which comes into effect on Friday. Economists are warning that several million workers who operate in Britain’s shadow economy are at risk of missing out on pay increases from the recent £7.20 an hour national living wage for workers aged 25 and over, or a 50p increase on the old minimum wage. The government has admitted that it has no accurate view of how many people are underpaid in the shadow economy and has launched an investigation in an effort to find out. Estimates range from 1.8 million to 6.4 million and experts predict the recent pay floor could result in hundreds of thousands more workers shifting to the lower-paid shadow economy,while consumers and businesses balk at paying higher wages in the formal economy.
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Source: theguardian.com