National Minimum Wage Increase

[good96]

With the NMW increase from April 2025 rising to £12.21 - for someone who works 40 hours a week - that is £25,400!

Can see so many businesses struggling/restructuring/redundancies after this!

Yes, but they still get paid for 52 weeks s year. They get paid for their holidays snd bank holidays.

Shhhhh, don't tell them that, they'll be campaigning to have that stopped next.

You really can't know that, they may find work easier than you because they're cheaper. There tends to be more MW work around than anything else.

My OH was made redundant this year, it was great for us. The statutory redundancy payment was a great one off windfall for us, he could take a few months off and get his driving license finally. He got a new 50p above MW job again easily, which is the same level he was before but there's much much less stress and responsibility so he's really pleased. Everyone made redundant from there (hotel so about 50 people) were all really happy with the redundancy and all found new work.

Employers tend to overvalue their business contribution to the local community and their employees I think, on the end they are almost always replaceable.

I agree it's not right that wages above MW haven't risen with it but again that's down to employers. All workers should really be negotiating at least an equivalent rise but that's up to them really. This MW increase should be welcomed by all workers because it really gives them an easy, legitimate reason to ask for a rise.

Why were those 50 people made redundant from the hotel?

Old, outdated hotels in seaside towns aren't doing very well. People prefer to holiday in self catering/air BnB or go abroad. The hotel has been bought by a developer who have planning to demolish it and build an aparthotel, apartments and some bare minimum sheltered housing under their section 106 mandatory provision.

This ^

£25,400 is a pittance to live on in this day and age. Employers should be ashamed that they are expecting people to work 40 hour weeks and not paying them enough to live on!

Whilst I fully support an increase in NMW, the reality of this is that

1. More people will pay more tax and NI from their pay packets as the tax bands are likely to be held
2. Some people will find their benefits etc tapered or removed as they pass thresholds
3. If employers NI goes up then they may give people fewer hours to try to stay close to or below the threshold.
4. Increased automation to remove certain jobs altogether eg self service checkouts, pay at pump in fuel stations, more chatbot customer service.
5. In jobs with banded pay structures, more people may find themselves “stuck” in a lower band for longer which is never great for morale.
6. Some delightful employers may decide to try to combine multiple jobs into one and frame it as a restructuring opportunity.
7. Prices will rise. Because of course they will.

6% is a lovely headline but the devil is in the detail especially with other employment related changes on the horizon.

Well then that’s great for you, and suggests that your husband should have moved jobs earlier.

As I say, luckily for our business we have room to increase prices, cut hours, even cut staff should the need arise, but not every business will be able to afford to do that, and not everyone will be as lucky as your husband and find better paid work that they prefer doing. On the other hand, they may do! That’s capitalism for you, if the units of production can make money for the business, they will be hired.

We are lucky as we are a sales business so we have the ability to raise prices. However, if the government raised our wage bill to a level where prices could no longer be raised to cover this, then of course we would not be viable - no business would be. In that circumstance hopefully our employees would just find alternative work, or go on benefits.

I should add that we are only ok on such low wages because we own our house outright and have no children (why am I on Mumsnet? Penis Beaker).

NMW (especially if single) is usually much more difficult to live on if you have housing costs, much worse if you have childcare costs. I know single adults still living with their parents or damp, overcrowded and poorly maintained house shares into their 40s, it's terrible and really stunts their whole lives.

6% is a good figure. We’ll raise our prices by around 5%, cut some hours and consolidate some tasks into existing employees’ roles instead of taking on new staff.

To be honest, these measures force businesses to be more efficient and price conscious, which is probably a good thing. We’ve held off raising prices but this gives us a good opportunity to increase across the board.

As Thomas Sowell says, higher minimum wage always results in more unemployment. Expect Labour to soon say they have to increase benefits.
More will be disincentivised to work, innovate and graft.

This country sadly is being decimated. China, Russia and India are grafting hard to take our place in the world.

Labour is weakening family structures, the beadrock of societ and building block of communities. Urging young children to move out of their parents' homes before they're mature enough.

Instead of creating opportunities for wealth creation all Labour is interested is destroying ambition and brainwashing people into seeing government as their parents.

Minimum wage laws both a. Increase unemployment and thereby increase welfare dependency and b. Depress economic activity and thereby reduce tax revenue. These are both quantifiable financial costs to government/society. Forcing an increase in welfare dependency at a huge financial and psychological cost to society is despicable.

Having minimum wage laws to prevent the exploitation of labor while simultaneously permitting free trade with countries that lack such laws is foolish.

“If you have been voting for politicians who promise to give you goodies at someone else's expense, then you have no right to complain when they take your money and give it to someone else, including themselves.”
― Thomas Sowell

Well if the business needs them in order to function, then they are 'worth' whatever the going rate is. This is like saying, I'm not paying 250k for a house because I think it's it only 'worth' 20k. The trouble is that you aren't going to get a house for 20k, and you still need somewhere to live!

If businesses aren't willing to increase wages then who cares if the staff are laid off? What's the point in them working a 40 hour week and be being barely any better off than people staying at home on benefits? If workers can't afford to live after working a 40 hour week then what is the point of the business? Just so that the owner can make a profit?

I worked payroll in the early 2000's.

£12,500 was the going rate for a "skilled man" working a CNC or similar machine on the shop floor. It was seen as a good wage. Overtime was available to most, around 25% of shop floor workers did around 60 hrs pw. Labourers got less, but also had overtime at 1.5 or double time on Sunday. Office staff less still.

Managers were paid £15-20k depending on negotiating skills and whether they were bought in or trained up. They were monthly paid so any extra hours were for free.

Living cost less. My first house cost £19k and I easily managed my tiny mortgage and all bills on a wage of around £10-12K. My gas and electric combined was under £50 pm, food around £65 pm, petrol £20 a tank and mortgage just £210 per month.

I'm not even sure if NMW existed back then, but if it did it was far less than £13,500.

We are cutting hours. We can't raise prices as we have to compete with China as it is. We will have to close I think. The most recent Tories were absolutely shit for small UK manufacturers but Labour are worse. I hope my kids get to see some positive growth in this country because it doesn't look like dh and I will.

It’s not as simple as that though. Because when the govt intervenes to set wage costs, it does change the economics of it. So if we can make a profit selling an item at (say) £500, but then the govt erodes this profit by increasing wages, we will increase the price to pull that profit back.

We might be able to charge £600 and make more profit, but there will of course hit a point where the price reaches its elasticity point and we start losing customers. If the govt continues to increase prices to erode profits then at some point we would stop selling. This would be where it would be more financially viable for us to get a different job of course.

Of course our employees are important to us, but if wages reach a level where we’re no longer profitable, then it doesn’t really matter what the govt sets them at, they won’t be able to find a job. Or, alternately, the price of goods will have to increase so much that it cancels out any gain in wages anyway. We aren’t a charitable organisation - our business exists to make money, and if we simply can’t sell our product at a level that makes a profit, then we won’t do it.

What a naive post. I can't be bothered to point out how wrong you are because I have no fight left in me.

UK workers get paid annual leave, currently 28days minimum I think. So the sums don't matter if it's earnings from working or holiday pay, it's the same result.

COL living issues won’t be solved by these measures. Prices will go up negating the rise to those on a lower income.

DH heads up a low margin firm which is a subsidiary of a firm based overseas where the cost of operating is much lower. The bill for the NMW rise and NI to the UK business will be c£1m. Combine this with the day one workers rights and you have a perfect storm. And this is in an industry which has already been affected by other factors. He’s been holed up with his Senior team trying to find a way to avoid site closures but the reality is, there isn’t one - so redundancies will ensue. New hires will pretty much have to be restricted to applicants with previous experience because right now, no one can afford to get it wrong. They are looking at ways of increasing the level of automation to reduce costs - and this won’t create jobs for anyone in the local community. None of these measures will increase employee satisfaction, customer satisfaction or profitability - they’ll just allow them to stand still or reduce further losses.

It all sounds great on paper though.

As someone on nmw I think the increase is very welcome.
Don't spout all the bigger picture stuff to me.
I work hard and see plenty who work no harder ( perhaps even less) who are rolling in it.
The pandemic showed how essential nmw workers are to the functioning of society because a bloody lot of us kept going into work to keep everything running.
I knew at the time that all those people who stood clapping those of us doing the graft and running the risks would soon enough forget.
Perhaps Tarquin can forfeit one foreign holiday a year so the plebs can order a kfc once in a blue moon.

Agree there is nothing wrong with zero hours contracts as a principal. Where it is a problem is if the employee pretty much has to be available at short notice 40 hours or more a week and can’t turn down hours but isn’t guaranteed any hours either

I run a private nursery although all of the children are funded and no one actually pays for any hours.

This is going to be so hard to manage as our income is limited to council funding. My team are incredibly experienced and have been here a long time and will need an increase in line with 6% to feel valued but I’m not sure if we can weather this.

I work another role alongside running the nursery as the nursery isn’t that profitable but it is hugely fulfilling. It might be that this is the point where we have to close the nursery as the numbers just don’t work.

I would also like to point out that businesses amalgamating roles or doing away with low paid workers doesn't really wash either.
I can't see that Emma from the office would be keen to get down on her hands and knees in her business suit to bleach scrub the claggy bits in the staff toilets.

It’s not your employees fault that your business is struggling. People deserve a living wage after years of wage stagnation.

Exactly this!!!

All these people saying "well it just means we'll cut those people's working hours"- how will you do that and still have a functioning business? If you're concerned about staffing costs, I highly doubt you were giving them more than the bare minimum hours per week you could get away with and still get the job done.

It doesn't make any sense to worry about someone being paid £1 an hour more, when you've apparently up to now been paying someone £11 an hour for hours that you apparently could cut just like that.

You'd have to cut every NMW employee's role by 4 hours to keep them on the same wage they're on now. There's no way to do that without the business falling apart. You'd have to be running a very inefficient business currently if that work could be managed by your existing staff without them also taking on extra hours. And your higher salaried workers would get fed up and either leave or demand more pay themselves if you put the extra work onto them. It's an empty threat.