£5 minimum wage

[peterjhale]

The Confederation of British Industry (CBI) has warned that small businesses in the UK are becoming increasingly uneasy about rises in the minimum wage.

The CBI has voiced its concerns over the effects a £5 minimum wage would have on UK employees.

While the increase may be acceptable to many small businesses, the trend of annual inflation is a growing concern.

The minimum wage rises by 7.8 per cent to £4.85 an hour in October after already increasing by 7 per cent last year. A similar rise next year would take it to £5.20.





In the light of current trends, the pressures of rising employment costs in the UK may lead to more businesses transferring its employee base to cheaper parts of the world, such as India or China.

The minimum wage is more associated with retail; domestic cleaning, hairdressing and other service based industries. However the CBI warns that manufacturers will also begin to feel the strain.

Digby Jones, head of the CBI, said, “The unions will say that this country can afford five pounds. I have not heard one employer say it should go up. £4.85 is not dangerous but it is moving away from being a safety net to having a deleterious effect.”

Another cause for concern is that employees higher up the pay scale are starting to notice gradual shrinkage in pay differences between themselves and junior workers.

Richard Dodd, a spokesperson for the CBI, said, “The Low Pay Commission has to understand that minimum wage increases on this scale have a ripple effect at higher wage levels.

“Annual above-inflation rises mean that the problem renews itself every 12 months.”

However the TUC have argued that a £5 would still be too modest.

Brendon Barber, General Secretary of the TUC, said, “Every time an increase is proposed we hear the same noises from employers forewarning the demise of the economy and the worrying implications for British jobs, yet every increase achieved since 1999 has been absorbed without any adverse effect on the economy.”

However, only time will tell if the small business sector, with less financial security, can absorb the minimum wage increases.

[g00gl3r]

Perhaps the money we save on the drop in credit card fraud should go on extra wages. I can see in a few years, UK holding only strong small family businesses that wouldn't go abroad, this would be a good thing I think as it would be personal strength and security.

Only a large company can go abroad big time, which means more space for smaller companies here. I live in the potteries where all of our culture has changed due to pot banks moving to find cheaper wage outlays.

The potteries now consists of lots of small businesses that are growing stronger by the day...!

Read in to that what you will... (we also still have the best ceramic wall and floor tilers here along with british owned H + R ohnsons which rather than big UK wage bills, or going abroad is now buying alot of stock from out of the UK, which still means big warehousing in the UK)