Businesses threatened by increases to minimum wage

A
rise in the minimum wage to £5 an hour would hit businesses hard according to
the Association of Chartered Certified Accountants (ACCA).

In a
survey of 500 ACCA members, representing 10,000 businesses, almost 80 per cent
of respondents thought an increase of the National Minimum Wage (NMW) would
have a serious effect on the economy and employment.

Thirty-eight
per cent of respondents said the existing minimum wage had already made a big
impact on employment practices. Employers were more likely to abolish paid
breaks, cut working hours and increase workloads to re-coup costs.

ACCA’s
head of small business, David Harvey, said that if the NMW were raised to £5
per hour as proposed by the TUC, employment and profitability would be
seriously damaged.

He
commented: "This survey shows that there is a ceiling at which the NMW
will become counter productive. It also reveals that a significant number of
companies have already been adversely affected even at the lower rate and that
the proportion is increasing year on year.

"A
higher NMW is not a one-way bet for lower paid workers particularly in regions
where the NMW is high in relation to costs and prices in the local economy. At
£5 the NMW would close businesses."

www.accaglobal.com

By
Ben Willmott

 

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