Commenting on Labour recent proposals to give employers that agree to increase wages to the Living Wage £1,000, paid through increased tax receipts, John Allan, National Chairman, Federation of Small Businesses, said:
“Our members will be sceptical about these proposals for the Living Wage. Many simply won't be able to afford the wage increases, which the tax rebate will only cover in part.
Moreover, the level of increase over the National Minimum Wage is in excess of 30 per cent. That must risk stoking inflation, further eroding living standards for the very people the policy is meant to help. It is also difficult to see how this policy creates incentives for our members to take on workers and tackle the urgent issue of long term and youth unemployment. Until Labour squares those circles,
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See Milton Friedman on Minimum Wage
https://www.youtube.com/watch?v=ca8Z__o52sk