Minimum wage increase could mean job losses, says NFRN

By Éilis Cronin in Industry News 26th October 2021

The government’s forthcoming rise in the minimum wage to £9.50 per hour is already being criticised by industry bodies and opposition politicians.

The NFRN says that the increase, which will come into effect next April, “will be a bitter blow to small businesses that are already struggling to survive” and could threaten jobs.

It emerged yesterday (25 October) that Chancellor Rishi Sunak is going to announce in his Autumn Budget that the main minimum wage – for those 23 and over – will go up by 59p from its current level of £8.91 per hour, along with corresponding increases for younger people’s wages.

For those aged 21-22 it will go up from £8.36 to £9.18; for those aged 18-20 from £6.56 to £6.83; for under-18s from £4.62 to £4.81; and for apprentices from £4.30 to £4.81.

Sunak said that the rise in minimum wage was part of the government’s plan to end low pay but Labour’s shadow chief secretary to the Treasury, Bridget Phillipson, described the increase as underwhelming.

She said it would mostly be swallowed up by tax rises, universal credit cuts and higher energy bills.

NFRN national president Narinder Randhawa said: “Rather than boosting many shop workers’ incomes, the proposed increase will have the opposite effect of threatening jobs in the sector.

“We would all like to pay our staff more, but the headline increase in the wage rate does not include the increase in National Insurance and pension contributions that employers also have to pay.

“Given that many of the items on sale in our 11,000 members’ stores – particularly newspapers and magazines – are price marked, retailers are unable to increase their prices to cover these additional payrolls costs. “

Randhawa added that independent retailers have already been hit hard by the Covid pandemic, with many having to reduce staff levels and hours and take on more of the work themselves.

He added: “This increase to the national minimum wage will only make matters worse.

“At a time when small businesses need help and support more than ever, this move by the government feels like a kick in the teeth for those that are already struggling to survive.”