Labour Party leader, Jeremy Corbyn has this week announced that Labour would increase the National Living Wage to £10 per hour by 2020.
The policy would see the introduction of what the Labour Party calls the “Real Living Wage”, if Labour were to win the next General Election, which will be an increase of more than 33% from the current £7.50 National Living Wage.
In a five year period, the wage level for those over the age of 25 has increased by 21%, from £6.19 in 2012 to £7.50 in 2017, compared to a rise of a more manageable 12.1% between 2007 and 2012. The Government has scaled down their target for the National Living Wage from £9.00 per hour to around £8.75 per hour by 2020.
Independent retailers and micro businesses cannot easily absorb increasing payroll costs; an overwhelming 84% of respondents to the NFRN’s Living Wage Survey 2016 said that the Living Wage has had a negative impact on their business. As a result, 74% of retailers have had to reduce staff working hours and 44% have had to reduce staff numbers.
Commenting on the announcement, NFRN CEO, Paul Baxter said: “If the government or any incoming government persists with sharp increases to the living wage it will cost thousands of jobs in the retail sector alone.”
“Politicians need to carefully consider the real impact that any changes to living wages has on small independent businesses, as further increases could see unprecedented job losses, and many store closures, robbing communities of a valuable lifeline. We urge politicians not to use a living wage as a political football and to be realistic with the current business climate, with many small businesses seeing increases in their rates, cost of stock, insurance, and energy bills, it makes the cost of running their business becoming even more difficult.”