PracticeConsultingCBI cautious over minimum wage rise

CBI cautious over minimum wage rise

The Confederation of British Industry has claimed the minimum wage of £3.70 per hour is a prudent level, enabling the most affected employers to absorb or pass on extra costs.

The CBI made the claim in evidence published this weeek to the Low Pay Commission, the independent body tasked with introducing a new minimum wage by October 2001.

It urged the Commission to continue using the minimum wage as a floor below which wages should not fall, rather than an escalator for forcing up pay levels.

The CBI warned increasing the rate to more than £4 per hour would leave many businesses struggling to cope with higher wage bills, with a knock on effect on employment.

The CBI also opposed, automatic annual increases, which could prove unaffordable during an economic downturn.

John Cridland, the CBI’s Deputy Director-General and a business representative on the Low Pay Commission, said: ‘The minimum wage has worked well overall. We should prevent it withering on the vine by raising the rate as circumstances allow.’

Links

Higher minimum wage will hurt business

Low Pay Commission online

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