Britain's slow wage growth could be to do with the taxes upon wages paid

It's a standard and completely unsurprising economic point that taxes levied upon the employment of labour come out of the wages paid for that labour. The employer is interested in the total price to be paid to gain the work desired, how that is divided between, say, national insurance and wages, is of no consequence to said employer. They're both part of the total costs, raise the NI portion and you'll lower the wages part.

Thus we might have a useful explanation for slow wage growth recently:

The Apprenticeship Levy, which came into effect last April, forces companies with a wage bill of more than £3 billion to pay 0.5 per cent of it to the Education and Skills Funding Agency (ESFA), which is part of the Department for Education.  

The companies have until April 2019 to draw down the funding, which they must use to take on new apprentices, or train existing staff.

As is the nature of these things a flat rate tax will largely produce revenue from those on higher wages. As is also the nature of these things apprentices are generally paid rather low wages. To tax the higher paid to produce lower wage jobs - and, as above, the total charge coming out of wages, it ain't the employers carrying the economic burden - will tend to reduce wages, won't it? 

What is one of the major complaints about the British economy currently? That there's not much wage growth.

Gosh, we wonder why?

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