Commenting on the UK’s ‘low pay problem’, think tank the Resolution Foundation has stated that Britain ‘can afford an even higher minimum wage’.
On 1 April 2019, the National Minimum Wage (NMW) and National Living Wage (NLW) rates rose. The NLW for employees aged 25 and over is £8.21 per hour. Workers aged between 21 and 24 are entitled to at least £7.70 an hour. The NMW for those aged between 18 and 20 is £6.15 per hour, and £4.35 an hour for those aged 16 or 17. Apprentices are currently entitled to at least £3.90 per hour.
In its ‘Low Pay Britain’ report, the Resolution Foundation stated that, for most of the last two decades, ‘one in five employees has been in low paid work’. The think tank supports the government’s commitment to end low pay altogether.
However, it also said that further increases should be ‘implemented more cautiously’. The business group suggested that policymakers ‘might wish to aim for a fast – but slightly slower rate – of increase than recently seen’.
Meanwhile, the Federation of Small Businesses (FSB) has also warned of wage increases taking their toll. Mike Cherry, National Chairman of the FSB, said: ‘Firms are having to cut profitability, hold back investment and put up prices to absorb them. Small businesses are also contending with rising business rates, increasing pension costs and higher input costs due to a weakened pound.’
What are your thoughts on the National Minimum Wage? Could your small business sustain a higher rate?