1. ITV Report

Minimum wage increases place workers at risk from automation, think tank warns

Jobs such as cashiers are vulnerable to automation. Credit: PA

Increases in the minimum wage could place workers at risk from automation, a think tank has warned.

The Institute for Fiscal Studies called for a monitoring of the minimum wage rate as employers look to save money by automatising aspects of their business.

For employees aged 25 and over the minimum wage is currently £7.50, rising to £7.83 in April, with the rate scheduled to reach 60% of median wages in 2020 - around £8.56.

Those set to be brought within the minimum wage net in 2020 are likely to be from the most "routine" occupations - such as retail cashiers and receptionists, which are most vulnerable to automation.

"The fact that there seemed to be a negligible employment impact of a minimum at £6.70 per hour - the 2015 rate - does not mean that the same will be true of the rate of over £8.50 per hour that is set to apply in 2020,” said Agnes Norris Keiller, a research economist at the IFS and an author of the new research.

"Beyond some point, a higher minimum must start affecting employment, and we do not know where that point is.

"The fact that the higher minimum will increasingly affect jobs that appear to be more automatable is an additional reason why extremely careful monitoring is required.

"Meanwhile even higher rates, as proposed for example by the Labour Party, would bring even more employees in more automatable jobs into the minimum wage net."

The research highlighted how the use of technology to replace some jobs can create new jobs that are complementary to that technology.

Research in the US has found some negative impacts of higher minimum wages on the employment of low-skilled people in automatable occupations, while also finding evidence of concurrent employment gains among other groups.

"The National Living Wage is creating a stronger economy and a fairer society, having delivered the fastest pay rise for the lowest earners in 20 years,” a Government spokesman said.

"But we also want to create highly-skilled, well-paid jobs for the future, backing innovation and supporting the development of new skills through our Industrial Strategy.

"That's why the Government is working with industry to ensure the benefits of new technologies are felt across different sectors and regions."

Shadow business secretary Rebecca Long Bailey said: "Technological change, if harnessed effectively, could bring about immense benefits - transforming jobs and workplaces and driving up productivity and living standards.

"All workers should be paid a full and fair wage, which is why Labour has pledged to introduce a Real Living Wage of at least £10 an hour by 2020, as well as support for smaller businesses to pay it.

"Labour will invest in our country's future, new technologies, our businesses, our infrastructure and people. Higher wages, good jobs, greater investment in skills and technology to boost productivity and high employment all goes together. They are complements, not trade-offs."