Friday's announcement that the minimum wage is to rise 2.2% has caused some concern in the retail sector where many employees are on low wages and businesses are struggling to preserve jobs.
The British Retail Consortium (BRC) has advised that next year’s increase in the National Minimum Wage must be no more than 1.7% to help retailers continue their vital role of creating jobs at the bottom end of the market.
The adult minimum wage increased on Friday (see previous story) to £5.93 from £5.80 per hour – a rise of 2.2%. The Low Pay Commission (LPC) is currently considering October 2011’s increase, which will be announced next spring.
The BRC supports the principle of the minimum wage but warns any increase above 1.7%, the average rate of earnings increases over the last 12 months, would seriously impede retailers’ ability to maintain and create jobs.
British Retail Consortium Director General Stephen Robertson said, “There’s a delicate compromise between higher wages and more jobs. But the best protection for wages is preserving jobs to keep people working.
“Anything up to a 1.7% increase in next year’s minimum wage strikes a sensible balance between helping low-paid workers and enabling retailers to create and maintain jobs. It’s the private sector that will drive the economic growth that will provide the jobs and tax revenues of the future.
“But consumer confidence is fragile, while the impact of the government cuts and nervousness about the housing market are creating a lot of uncertainty.
“Trading conditions are tough. Higher costs, such as next April’s National Insurance increase, will pile on even more pressure. Even a small increase in 2011’s minimum wage could choke off retailers’ vital potential to create new jobs.”
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