Minimum wage increase but will living costs increase and it will make no difference?

[poppyviolet]

I'm on £8.22 an hour. I understand in April this will increase, I believe to £8.75? Do you think that businesses will have to put prices up to be able to afford to pay the staff and it won't make a difference?

We’ve always paid above minimum wage but been caught not so not only our are prices going up but having to reduce hours as well so could be a double whammy.

Spoken to a number of businesses in the same boat. Also means I need to go back up to 10-12 days to cover the staff looses till we can raise prices enough. With rent and rates also going up we may have to call it a day. Which is a shame as we employ 17 people.

It's roughly a 6% payrise, which is more than 3 times the rate of inflation, so in theory your associated life costs shouldn't increase by as much. Individual business who pay NMW may raise prices I suppose ( I don't know if they have done previously) so it depends where the majority of your expenditure goes. Eg your housing costs shouldn't go up as a result. Then it depends where you shop. I wouldn't expect Aldi, for example, to raise their prices as they already pay their staff more than NMW so won't be directly effected

Caught now.

But the companies that supply Aldi, and the logistics companies that deliver to them, etc, all that will go up if they pay minimum wage.

I don't think there will be a massive oncost, but it's bound to have some impact somewhere.

I'm going to have to increase my prices to cover it

Given that many people working in childcare are on minimum wage and the government funding isn't increasing to match then anyone who needs childcare to work is at risk of much higher bills or their childcare provider closing down.

We got an email from our Childcare provider about this. They explained that wages are the largest outgoing and are seeing a 6% increase. They are already underpaid for the funded hours. Apparently the extra funding allocated to councils is a 1.7% increase but they dont know how much of that will be passed on to providers.

For us paying 2 days a week nursery for one child is an extra £20 per month out of our pockets.

It's not just the wage increase but employers pensions contributions and NI payments that will increase.

It goes up to £8.72.

The reality is companies will cut down on staff numbers or hours and expect the same performance.

Well my husband's employer has just reduced everyone's hours and cut one of their breaks from April because of this so we won't see any increase unfortunately. I imagine this may happen elsewhere.

Prices are constantly rising anyway, even when minimum wage doesn't. So.

Sounds like posters are not happy it’s going up? It’s a fantastic rise from the government and It’s a good thing. If it went up 10p, people would be calling them Tory bastards.

I think it is good that it is going up, living costs keep rising and we are struggling a bit. Just explaining that DH's employers have cut hours so we won't see any increase sadly. I do have sympathies for small businesses here but my DH's employer is far from that

I think this is good. Why should taxpayers subsidise low wages via benefits (tax credits, housing benefits etc). This is why the welfare bill is so huge because so many large companies pay low wages with the expectation that their minimum wage workers will get benefit subsidies in order to live. These companies are then making huge profits.

I feel sorry for smaller companies who have to increase low wages by law but surely these can be offset as expenses and will reduce Corporation tax?

I find I just lose money. We private rent and our rent has gone up £50 a month every year, I'm waiting for confirmation of that at the moment. Then council tax goes up and now the tv licence too. We will lose another £60 a month minimum. If my DH does over time we end up being crucified in tax. You just can't win.

Doing overtime shouldn't mean you are "crucified" by tax. Something wrong there!

This does affect companies that pay above min wage too, as they will no longer be the same % above nmw so may need to increase to reflect that. They are also affected by suppliers etc, it's a knock on effect.
People will lose hours / jobs, businesses already struggling with business rates etc may be closed completely.
We are council tenants and were put in to a property in a high council tax cost area, rent has increased by £10 per week each year. An extra £500 every year soon adds up.
Independent businesses are rapidly declining. We will be heading for a choice of chains and not much else before long. Hard economic times ahead I think.

You do realise that at the moment that a full time worker on NMW earns just over £16,000 a year and with increase will earn just over £17,000 and people think this is an unreasonable amount to earn?

Ffsseriously
Yes, I do think 17,000 a year is not enough to earn. It works out as £1,278 a month approx. With rent/mortgage, tax, electricity, etc etc...

@mothertruck3r

You need to be paying corporation tax first.

Our wage bill would rise by about £18,000 a year if we keep the difference between all our staff wages. Our profit last year was less than two. So will need to cut costs. And that means hours. So staff will get paid more per hour but will get less hours.

Looking at other costs too and trying to raise prices but a new competitor is trying to enter the market with stupidly low prices.

This idea is called the wage price spiral...

en.wikipedia.org/wiki/Price/wage_spiral

Pretty much. I'm guessing benefits won't rise either, so at the cost of living spirals to accommodate the rise they'll be left behind.

For those cutting hours, potential this frees up their workers to spend time working a second job? And overall have more money in their pocket.

Especially if the employers are fair about how they do it. Ie, give them a full day/half day not working as opposed to shaving 15 minutes off the end of each day.

Most of ours are going from 5 7.5 hour days to 4 8 hour days. Which can be fixed or flexible so yes they could get a second job.

It will have a big impact on employers, wages & pension contributions will increase. Along with business rates that are extortionate for businesses, so either they pass the increase to their customers/service users which could cause them to be uncompetitive in their given sector, a reduction in workers hours or worse case causing a business to fail.

Time will tell of the NMW increase is of true benefit to the workforce.

So basically the business owners on here want to keep the poor, poor? Ok then.