Keep minimum wage in line with economy, retailers urge

The British Retail Consortium has urged the government to make decisions about the national minimum wage based on the economic climate of the time.

The call came as the consortium issued its fifth survey looking into the impact of national minimum wage increases on the retail sector.

The adult national minimum wage will rise to £5.05 on 1 October 2005 and the Low Pay Commission has recommended another 6% increase (£5.35) in October 2006.

The survey results, to be published mid November, will show the projected impact of an increase to £5.35 and the likely impact of the increase to £5.05.

It will include measures of wage differentials, staff turnover, redundancies and benefit packages. The 2004 survey showed that the rise to £4.85 cost retailers £1.7bn.

Kevin Hawkins, director-general of the British Retail Consortium, said: “Above inflation increases to the minimum wage are proving very difficult for both larger and smaller retailers to absorb – especially in today’s tough trading conditions.

“Recommendations for the October 2006 level should be made in light of the state of the economy at the time.  With slow retail sales growth and an uncertain economic climate, retailers are becoming very apprehensive that the Low Pay Commission will endorse its recommendation of £5.35, which could severely impact upon wage differentials, recruitment rates, benefit packages and redundancies.”

Comments are closed.