An increase in the national minimum wage will make it harder for UK retailers to maintain and create jobs in the current climate, the British Retail Consortium has said.
The 2.5% rise, which came into effect on Saturday (1 October) takes the adult minimum wage up from GBP5.93 (US$9.2) an hour to GBP6.08.
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Describing the move as a “disproportionate rise”, the BRC said that it supports the principle of the minimum wage as a basic floor for decent pay, it had urged the Low Pay Commission to recommend a lower rise which would have been “more in line with economic realities”.
According to the BRC, consumers are buying less and retail job numbers are down on a year ago. While it said that most shop workers earn above the minimum, but retail is a labour intensive sector, affected more by rising wage costs than most others.
The Low Pay Commission is considering what rise to recommend in 2012. The BRC said that retailers are calling for an increase of no more than 2.1% to “ensure the minimum wage doesn’t add to the pressures on the sector. This would reflect movements in average earnings over the past year”.
It is also calling for more notice of decisions to help retailers balance their budgets. Currently, businesses are told about the change six months before it happens.
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By GlobalData“Supporting jobs in the current climate is essential. While most retail jobs pay above the minimum wage, increases inevitably push up salaries across the board and make it harder for companies to maintain and expand their workforces,” said BRC director general Stephen Robertson.
“The retail sector has a long record of jobs growth but the latest figures show a fall. Retail employment cannot be taken for granted.”
