BRC says minimum wage causing job losses

21-09-2006

The rising level of the national minimum wage (NMW) has forced employers to shed record number of jobs, the British Retail Consortium (BRC) has today said.

Ahead of next month's six per cent rise that will see the NMW reach £5.35 an hour; the lobby group claims that 78,000 retail posts have been cut during the last 12 months.

A four per cent rise in the minimum wage at the corresponding time last year has added more than £1.2 billion to retailers' wage bills, the BRC insists, predicting that next month's rise will mean costs of £1.5 billion will be incurred during 2007.

Today's NMW survey reveals that the number of people under the employ of large or multiple retailers fell by 61,000 during the last year, while small retailers cut their staff by a combined number of 17,000.

The figures represent three and two per cent of the respective workforces.

Kevin Hawkins, director general of the BRC, claims that the minimum wage has reached its "tipping point", and called on the Loy Pay Commission to place an immediate two-year block on further inflation-beating increases.

"Retailers tell us they are being expected to find £2.7 billion extra for wages over just two years. With other costs, including energy prices, rent, rates and service charges shooting up, it's no surprise so many retailers are cutting staffing costs by employing fewer people," he said today.

According to the BRC's statistics, more than one in ten of multiple retailers polled say they are anticipating further job cuts as budgets get squeezed by the minimum wage, while a quarter admitted that staffing hours would have to be reduced.

But the Trades Union Congress has hit back in the row over the effect of the NMW upon retailers' finances, accusing the BRC of "inaccurate misfortune telling".

"Official figures show that although retail employment dipped slightly this year as consumers cut back on spending to clear debts, over the last two years 23,000 new jobs were created in retail. And in terms of setting a future minimum wage the latest figures show a healthy growth in sales," said general secretary Brendan Barber.


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