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Business groups wary of future wage rise

Published: 1 October 2010
As the national minimum wage increases 2%, the BRC warns of the effect of another increase next year, as retailers struggle to create jobs in tough conditions.
Business groups wary of future wage rise
The National Minimum Wage rate today increased 2.2% from £5.80 to £5.93 for workers aged over 21 and 1.9% to £4.92 an hour for workers aged 18 to 20. While the British Retail Consortium (BRC) supports an increase in the hourly rate for low-paid workers, it warns of the impact on retailers, should next year's wage increase be set above 1.7% - the average rate of earnings increases over the past 12 months.

BRC director general Stephen Robertson said: "There's a delicate compromise between higher wages and more jobs. But the best protection for wages is preserving jobs to keep people working.

"Anything up to a 1.7% increase in next year's minimum wage strikes a sensible balance between helping low-paid workers and enabling retailers to create and maintain jobs."

He added: "It's the private sector that will drive the economic growth that will provide the jobs and tax revenues of the future. But consumer confidence is fragile, while the impact of the government cuts and nervousness about the housing market are creating a lot of uncertainty. Trading conditions are tough"

The Confederation of British Industry (CBI) agreed with the BRC's comments. CBI director general John Cridland said of the minimum wage rise: "This is a moderate increase that recognises that many businesses are still finding economic conditions challenging. A larger rise could have priced lower-paid people out of the labour market."

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