It’s great news for the lower-paid, but there are mixed feelings in the business community about the rise in the minimum wage, introduced from today [1 October].
Conor D’Arcy, of economic think tank Resolution Foundation, which researches low pay, observes: “Past warnings about the negative effects of the minimum wage on employment have been wide of the mark, but the size of the increase in the new wage floor will certainly be challenging in sectors such as hospitality, retail and care.”
“While some [employers] may opt to reduce hours or new hires, experience tells us most absorb the pressures via some combination of small increases in prices, a dip in profits and productivity gains,” he adds.
Announced by George Osborne in July as part of his first post-election budget, the minimum wage will increase to £6.70 an hour for people over 21 (a rise of 20p an hour) from today. The government also plans to raise the minimum wage to £9 an hour by 2020, which critics argue could lead to lower hiring and higher employee costs.
Also introduced later this month will be the Modern Slavery Act 2015, which requires businesses to prepare a slavery and human trafficking statement each financial year, including a prominent link on their website.
For a full breakdown of the new national minimum wage rates, read here: