Calls for minimum wage to be set to other guidelines

23 August, 2007

The British Retail Consortium is calling for an "open, predictable process" in setting the National Minimum Wage to allow retailers to plan for the future.

A report commissioned by the group found that the minimum wage has risen by 46 per cent in the past eight years, "way above any of the economic indicators that should be influencing it".

BRC director general Kevin Hawkins said: "Taken together, the erratic increases of the past have outstripped all the economic indicators that should have guided them. This is now undermining many retailers' ability to create jobs while the uncertainty over future costs disrupts attempts to plan investment, recruitment and pay settlements."

The BRC says annual increases should be guided by an index of median earnings, productivity and how many workers in a sector earn the minimum wage.

In retail , 75 per cent of the workforce now earn the minimum wage.

The BRC's report says with so many earning that amount there is little room for employers to offer rewards or pay incentives to staff.

Hawkins said: "This report shows the minimum wage has shot up way above any measure of average wages or productivity. That cannot be afforded any longer. Retailers cannot repeatedly absorb substantial increases based on subjective ideas of what feels right."

From Oct 1 the adult minimum wage rate will rise 17 pence to £5.52 and that for 18 to 21-year-olds will increase to £4.60.

Market Monitor - page 13

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