PracticeConsultingHigher minimum wage will hurt business

Higher minimum wage will hurt business

Increasing the national minimum wage to as much as £5 per hour as proposed by the Trades Union Congress, will force many small businesses to close down their operations, according to ACCA.

Businesses that manage to absorb the extra wage bill would be forced to abolish paid breaks, cut working hours and increase workloads to recover the costs.

According to ACCA, at the present rate of pounds 3.70 per hour business can cope. However if the hourly wage were to rise to pounds 5, it believes this would represent a serious problem for its clients.

David Harvey, ACCA’s head of small business said the ceiling price of pounds 5/hour is the point at which businesses became unproductive and said many companies had already been adversely affected even at the current minimum wage level.

A higher level across the board would close businesses in regions ‘where the national minimum wage was high in relation to costs and prices in the local economy’.

The ACCA survey included 500 of its members who represented 10,000 businesses.

Links

FDs say minimum wage won’t harm business

ACCA website

TUC website

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