NMW to increase again next year to £12.21 ph.

We have a small business employing 8 staff, 2 on minimum wage.
Every time it goes up we have to raise the other 6 as well to keep the differential.
As a result of this we are having to do away with overtime, resulting in lower productivity and therefore sales and profit.
For the record I work unpaid and DH has not had a pay rise in 9 years.
This is going to be tough ....

Many companies in the UK are already doing this and it’s never going to change.This isn’t new information.

https://x.com/NoFarmsNoFoods/status/1851530073226056004?t=Odp3f8u7UpfJlJrYxVpdcw&s=19

Farmer considering taking his own life.

I think we need to be very aware of what sectors are affected and what the consequences could be.

I'm currently talking to someone I know well who has been stressed over this for the last three nights who is listening to the budget. He thought he was totally and utterly fucked.

But it looks like they've actually given some relief to those who employ less than 5 people full time.

He was commenting that it's just not worth doing business just before they said that.

The idea that business owners are all super wealthy or incompetent is nonsense. This guy I've seen not only survive but thrive during lockdown when others just curled up and died.

We need to actually understand WHO small business owners are and what they are like and have to offer.

What they are telling you is that, if pushed too far, businesses will move their operations to China and other low-wage countries. This then makes the UK staff unemployed, which pays much less than NMW.

You need to think beyond Stage 1.

So now you're advocating lowering UK working standards to the level of India or China so we can be competitive? Do you ever think before you type?

Focus on one issue ?
Which issue?
Struggling small businesses who are no financially viable?
On businesses that can't get staff ?
On families and young people ( alternative thread)
On the nhs, education , housing, climate change?

Everything is interconnected
Not everyone can be protected from harm during a transition to hopefully a better society
So many things are badly broken across the country

I think the person not reading the room is in here

The col crisis is affecting everyone. More so small businesses who are struggling massively atm. Labour, as usual, don’t read the room and focus on one issue without taking in the bigger picture.

Which hightlights that the problem probably isn't actually wages.

Its job opportunities and housing costs.

Housing has been driven hugely by four things - the rise in the number of second and holiday homes, inefficient use of the housing we have got (older couples an singles in large family homes and families in small houses and flats) and the rise of the buy to let industry and availability of work locally.

Seeing houses as an investment opportunity an a way to make money lies at the heart of cost of living issues. Even with stagnating wages, the population growth we have had and internal migration patterns, the rate at which housing costs has gone up has far outstripped the rate it should have.

Some of the places with the biggest issues with housing are those where young people have left to go to cities! Places like Cornwall and the Lakes. You can add a few quid to the NMW in these places, say 'look we did aren't we amazing', but you aren't solving shit for people on minimum wage in these places. They still haven't got a hope in hell of finding somewhere to live.

Then you've got places like the NE, where theres shit all left. The NMW will go much further here and you've got a decent chance of getting a house if you are employed cos no fucker else wants to live there. But thats the catch, there's no sodding jobs, cos no one invested there. So people are living on benefits and there are no jobs to find. So raising the NMW only serves to hit these people hardest of all because the cost of living is liable to increase so that supermarkets maintain their profit margins. Food banks will have less donations because those in the middle are also more squeezed because their wages HAVEN'T risen.

The issue is about the richest getting richer, but anyone who didn't own property by 2007 or had a significant inheritence since is significantly disadvantaged. 2007 marks the last housing market crash... (the cash rich bought up property whilst those who didn't have mortgages faced tighter restrictions and couldn't get property).

The market crash led to a decade of stagnanted wages whilst there was this huge move into property made possible by the crash for those who had money.

For years its been said that the lack of investiment in provincial towns has massively driven politics. Its what all the red wall/ blue wall stuff was about. People wanting jobs and services (yes like your local pub too) rather than boarded up buildings. The cost of living is part of that but actually if there are jobs and services available people who are struggling are significantly happier because theres still a sense of community. Its about the sense of abandonment by government.

In terms of business, the number of business peaked in 2020. Since then costs have risen considerably and taxes/wages have gone up.

It makes no sense to therefore try and hit small businesses that provide services in local areas harder. It will push people towards more radical politics because of the sense of being abandoned.

I think its note worthy to already acknowledge how many businesses have popped in the last couple of years. These are the latest government figures which were published earlier this month:

Between 2023 and 2024:

• the total business population decreased by 56,000 (1.0%)
• numbers of employing businesses decreased by 18,000 (1.2%), whilst non-employing business numbers decreased by 38,000 (0.9%)
• the decrease in non-employing businesses resulted from a decrease of 43,000 (1.5%) unregistered businesses, offset by an increase in non-employing registered businesses of 5,000 (0.4%)
• numbers of registered businesses decreased by 13,000 (0.5%)

Whilst we might want to improve wages and improve quality of life, we don't actually improve cost of living issues by raising the NMW. It sounds great to a lot of people, BUT IT DOESNT SOLVE ANY OF THE UNDERLYING ISSUES, and arguably it makes them worse in many areas.

Unless the government manages to tackle multinationals and housing then its all totally fucking meaningless deck chair shuffling, which I genuinely think will cause most problems for those right at the bottom.

I loved that show! Not sure Rich Job, Poor Job could work logistically lol but I get what you're saying.

Good luck.

I hope you find an employer that recognises your worth and what a difficult job it is.

I heard something yesterday and have just looked it up to confirm. The low pay commission that recommends the level the NMW is set at, are now asked to aim for two thirds of the median hourly pay. What does that mean? It means that 50% of people should be working for rates at least 50% more than NMW. It also means though, that 50% of people will be working for rates between NMW and 1.5x NMW.

I'm not certain whether that is going to be a viable approach to setting NMW long term. Don't know enough economics I guess ... What do others think?

Yes and that £7000 is, as far as I know, NET. So after tax! It's a lot.

It doesn’t mean a lot tbh. Companies will just raise everyone’s salary to keep the gap and businesses will raise their prices. It’s numbers on a page 🤷‍♀️

Agreed. We're a profitable small business, but with the proposed increase in e'ers NI, possibly pensions and NMW, we will need to reconsider how much of a payrise we're going to be able to give people next year.

We're already being pushed by clients into not increasing our fees even in line with inflation, so it's not like we can simply pass the costs up. Unfortunately we'll all have to share in the pain that increasing these "non worker" taxes creates.

I get what you mean OP. We have members of staff in a professional business that are now officially earning minimum wage. I think it's the phrasing and the history of NMW that leads to an uncomfortable feeling for me for those staff.

NMW was brought in to (rightly) improve the pay of many people that were in "low pay" jobs such as carers, shop workers, etc, who were being massively taken advantage of.

Now, NMW has reached a level that our entry level professional staff have always been paid and I now feel uncomfortable that we're "only" paying NMW.

I've just looked at the historical NMW. When it was introduced in 1999 it was £3.60 an hour. Taking inflation into account that is now worth £6.70. That compares to the actual current NMW of £11.44, going up (reportedly) to £12.21 from next year.

£3.60 in 1999 was way too low, admittedly (though I was an entry level professional employee at that time and was being paid £3.85 an hour), but that is still a significant increase over and above inflation.

People keep saying this but no one has claimed nmw jobs are easy, quite the opposite. Most people will have worked a NMW job at some point in their lives and understand the stressors involved.

The amount of people on here who think nmw jobs are easy and stress free is unbelievable. They should do a show like rich house poor but rich job poor job so people can see the reality.

Yes I think I will have to

We have been locked in a pay dispute for years now re. Fair pay parity with other government bodies. But it seems like there is no end sight :( pity as I love my job

Care homes are private companies, though. In 2015 I worked as a carer. Clients were billed about three to four times the cost of a carer's hourly wage. I, on the other hand, wasn't even getting minimum wage because I was paid for contact hours but not for travel between clients. Where was the rest of the money going? Some to office space and to pay for two care-coordinators. The rest? Profit.
I hardly think it really costs a care home £800 a week to care for someone given staff to residents ratio.

I don't necessarily disagree but ensuring people don't starve and that children are adequately clothed and warm is a more pressing need.

We all lose out if society doesn't care for the most vulnerable.

That news bulletin only mentions businesses going into insolvency and online retailers. The latter come from a significant portion registering as UK businesses despite being based overseas. I’d wager the majority of small businesses pay their fair share of tax.

It’s much harder for small businesses to avoid tax than massive corporations. Amazon, Starbucks, Google all managed to pay minuscule or no tax due to legal tax avoidance loopholes aided by the big 4 accountancy firms.

The key to getting better wages and better services is to grow the economy, by losing (critical) small businesses that cannot afford the increases isn't going to help grow the economy.
We all want higher wages - on that we can agree, but small businesses providing an essential service need to be able to absorb the costs of higher wages and higher NI contributions. On the current funding level they simply cannot.

Here in France, childcare and early years education is fully state-funded with a modest, means tested, charge for higher earners. Available full-time from three months old until children start school at 6yrs old. There are private / nanny / at home options (which are also state subsidised). Early morning and after school care also provided at a minimal cost. And yes, the nurseries (maternelles, starting from age 2/3 are often located in primary schools).

not everyone agrees with full time childcare for such young babies, but it means people aren’t scared to have a child due to childcare costs and allows parents, especially women, to work.

Well it is definitely not perfect and had a lot of problems at the moment. But I was using it as an example of an economy where people are earning significantly higher wages than in the UK. You could also pick any of the Scandinavian countries, France, the Netherlands, the US, Canada, Australia…. Take your pick really.

The fact is that people here are moaning that nurseries are going to go out of business because the people looking after their kids are going to be paid just over £12 an hour. Nursery workers in Germany are earning about £30,000 a year on average, and have been for a while. Fact most advanced economies have had some wage growth in the last two decades. The UK hasn’t. It sucks.

It is yes but whereas some nurseries will undoubtedly struggle it's not the same as not being able to feed your family. It's only right the NMW is increased given the cost of living.