§ 28. Mr. Beaumont-DarkTo ask the Secretary of State for Employment what research he has funded in his Department into the effect of wage rises on the level of employment.
§ Mr. HowardThe estimation of the effect of wage rises on employment is best dealt with by using a model which considers the economy as a whole. We therefore use results reported by the Treasury which indicate that a 1 per cent. rise in the average real wage lowers employment by about 110,000 to 220,000 overall.
My Department commissions much research on labour market issues and some projects may also shed light on the wage-employment relationship in particular sectors.