Self-employed ‘miss wage hike’

A leading think tank has warned of a sharp rise in incomes and the risk of middle-income and self-employed families being left behind as income inequality worsens in Britain.

According to research by the Institute for Fiscal Studies and the Nuffield Foundation, the government lacks the tools to raise the salaries of social welfare charities, self-employed middle-income and low-wage workers.

“While it’s easier said than done, we must find additional ways to recover from the massive revenue growth,” said Robert Joyce, the institute’s deputy director.

The British are facing the worst pressure on their real income in half a century due to rising inflation. High energy and food bills place the heaviest burden on poor households, who spend on average about twice as much as those on high-income households.

Although poor workers benefit from government policies to raise the minimum wage and expand the tax credit, these measures do not help those in higher wage brackets. “They can’t help the average earner who is seeing alarming wage stagnation and the minimum wage can’t help the growing group self-employed,” Joyce said.

The minimum wage for those over 23 will be raised from £ 8.91 to £ 9.50 in April. It covers two million workers, or 7 percent of the total workforce.

The institute says the minimum wage has helped lower-paid workers raise incomes, but has had little effect on wider income distribution. “Policy cupboards are empty outside of tax credits and minimum wages,” the report said, chaired by Sir Angus Dayton, a Nobel Prize-winning economist who led research on how household spending could be used to measure poverty.

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