Putting a ceiling on the living wage

The announcement of a rise in the National Minimum Wage is always awaited with trepidation by retailers. Rises in the past 10 years have exceeded 5% on four occasions.

But, while the industry will have to swallow the rise for 2010, the British Retail Consortium is already working on research to help it lobby the Government and ensure that future rises reflect the economic conditions retailers face.

This year’s 2.2% rise - up 13p to £5.93 - was announced in March and confirmed by the coalition Government in late June.

Other changes include a lowering of the age at which the adult rate applies from 22 to 21 and increases for the under-21s. For workers aged 18 to 20, the minimum wage will rise 9p to £4.92 an hour, while 16- and 17-year-olds will get a 7p increase - up to £3.64 an hour.

Opposed to the rise

The rise follows the recommendation of the Low Pay Commission - the body that advises the Government on pay - and is the second lowest in the history of the National Minimum Wage, which was introduced in 1999. But at 2.2% it is still almost double last year’s 1.2% rise.

Although it was welcomed by shop workers’ union Usdaw, the BRC remains opposed to the rise and had hoped that the wage rate would either be frozen or increased by 1% at the most, to reflect the fact that many retailers have been forced to cut jobs and freeze pay in the past 18 months.

“It’s irresponsible. The wage needs to reflect the economic realities businesses are facing and the increase was substantially more than we were calling for,” says BRC head of media and campaigns Richard Dodd.

However, it is likely there would have been further controversy had the Government made changes to March’s announcement because of the short lead time retailers have to plan and implement the changes.

The BRC has just finished collecting data for its annual survey of retailer reactions and analysis of this year’s rise in the National Minimum Wage. The data is used to produce a report, which is submitted to the Low Pay Commission.

The collation of the data is still in its early stages, but Dodd says it is likely retailers will be calling for a similar increase to the one they had hoped for last year. “It would be very surprising if retailers were calling for a rise above last year’s and I think the feeling will again be that anything above 1% would be excessive,” he says.