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Minister urges caution on minimum wage

01 February, 2013

The Association of Convenience Stores has welcomed government evidence to the Low Pay Commission urging caution on future minimum wage increases and their impact on employment.

Employment relations and consumer affairs minister Jo Swinson said: “The level of employment is now above its pre-recession peak, but the employment rate is below the pre-recession peak.

“This means that we believe that caution is required – particularly as the minimum wage rate is now at its highest ever level relative to average earnings for adults and remains high for young people.”

ACS said the minister’s evidence to the Low Pay Commission recognised that the National Minimum Wage (NMW) ‘bite’ (NMW as a proportion of median earnings) has increased to its highest level and evidence from the Low Pay Commission identified that the minimum wage has started to have a ‘small adverse’ impact on employment opportunities.

ACS evidence to the Low Pay Commission highlighted that 82% of retailers supported a freeze in the NMW rate. ACS has also engaged with the Commission through written and oral evidence, a retailer focus group and regional visits with retailers.

ACS chief executive James Lowman said: “We welcome the minister’s evidence to the Low Pay Commission which reinforces retailers’ views that a large increase in the national minimum wage would be damaging to the labour market.

“Retailers’ response to minimum wage increase is to cut working hours in the business and delay investment, which is counterproductive to the wider growth agenda.”