The Impact of the National Minimum Wage in Small Firms

James Arrowsmith*, Mark W. Gilman, Paul Edwards, Monder Ram

*Corresponding author for this work

Research output: Contribution to journalReview articlepeer-review

108 Citations (SciVal)

Abstract

The introduction of the National Minimum Wage (NMW) had potentially significant implications for small firms. Orthodox economic theory predicts adverse consequences, though institutional analysis points to potential efficiency as well as fairness effects. Using longitudinal data on 55 firms, this paper examines the impact of the NMW in small firms in clothing manufacture and hotel and catering. Different patterns of adjustment were observed, explained by both size and sector characteristics. Overall, the impact of the NMW was mediated by the informality of employment relations in the small firm.

Original languageEnglish
Pages (from-to)435-456
Number of pages22
JournalBritish Journal of Industrial Relations
Volume41
Issue number3
DOIs
Publication statusPublished - 19 Aug 2003

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