From the Guardian:
George Osborne’s £7.20 “national living wage” is sending “shockwaves” through the labour market as employers seek ways to minimise the extra costs, one of Britain’s largest recruiters has said.
Manpower said its survey of 2,100 employers suggested many were scaling back recruitment plans for the rest of the year, with some blaming the new minimum pay for over-25s, which comes into effect next April.
Employers were attempting to avoid paying the new rate by using groups of self-employed workers or focusing recruitment on younger people. Others had put a block on new recruitment altogether, it said.
The effect was already being felt in the wider jobs market, with the outlook the least optimistic for three years and job prospects “dwindling” in the runup to Christmas.
Landscaping and gardening is probably one of the most competitive industries in the UK. By paying an employee (over 25) £7.20 an hour a business will be looking at charging out a minimum of three times that amount, plus vat in which to recover all costs and make a profit.
Well run, focussed business, are (hopefully) already in a position to cope with the minimum (living) wage demand and in so many cases will already be paying good workers over and above. But how will the rest of the landscape industry cope?
Will the new living wage make a difference to your business plans?
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New Living Wage will need to be reviewed
Sir Ian Cheshire, the former chief executive of B&Q, Britain's largest DIY chain, called today for a review of the new National Living Wage to ensure that the costs to business are not too onerous
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Although Sir Ian made it clear that he supported the increase in the minimum wage, he told me that the impact on employment rates and the wage costs of many businesses was as yet unclear.
In the Budget in July, the Chancellor said that he wanted to see the minimum wage increase to £9 an hour by 2020.
Sir Ian said that could see wage bills increase by up to 60% for some businesses such as hotels, restaurants and care homes.
http://www.bbc.com/news/business-34416666
This kind of talk really annoys me. This is coming from a bloke who got a £3 million payoff from his old job at Kingfisher... what would he know about trying to live on the 'living wage' ? £7.20ph on a 40 hour week is what - £15k gross salary before tax and NI. Try living on that in SE England.
Kingfisher made £710 million net income in 2014 from the labour of their 79,000 employees, or in other words nearly £9,000 from each worker. There is plenty of scope to increase wages.
I do think that in the end all it will do is cause inflation and leave people in roughly the same position as before.
I think we need to be aiming to have people earning more than the minimum wage for the difference to be seen more clearly.
I do think that there is a limit on what small business can pay as pay gas to affect cost of goods /services
+1 Russ Francis. Retail is a sector in trouble. But it has far more to do with boardroom costs than frontline staff wages. £multi-million packages plus eyewatering cost investor soirees to join in on and administrative support to an extent there is virtually no job to do? At a time in history when consumer styles are on the move and these chumps have no response?
People who do work deserve to be paid. Properly. If we as "entrepreneurs" cannot organise our businesses in such a way that we can pay people properly we should continue as sole traders. It was very refreshing recently to hear a tory - no, not a liberally minded politician, much less a socialist but an out and out tory MP, obviously at best junior minister unknown with a view such as that - state the tautologous fact that paying wages to which the state has to add income for the recipient to be able to survive is getting state subsidies through the back door was refreshing to say the least.
That has been my view for many years, including a period taking on board all the bellyaches from so called business owners as an activist in the FSB. I see no reason whatsoever to change it.