NMW to increase again next year to £12.21 ph.

[ZoeZee]

If you’ve not had a pay rise this year, despite bringing it up to your employer, and now there’s set to be another 6% NMW increase next year (which is fantastic, don’t get me wrong) the pay gap is narrowing ever more between skilled/unskilled employees.

Skilled and those with MANY years of experience, might as ditch their responsible/stressful jobs (which often keep you awake at night) and look for something that doesn’t have the added responsibility?

Almost 20 years experience means nothing to some employers! AIBU?

Any employers who have a view on this increase, please let me know how this might affect you and your staff.

It's because if your business is no longer financially viable then logically you should probaby wind it up and get a job instead. Obviously you're free to pay yourself less than minimum wage if you want to or believe that things will pick up, etc but that's the risk you've taken on. You knew that when you started a business, presumably you thought the rewards would be worth the risks but like so many before you you may have been mistaken.

You don't get to exploit people for cheap labour because you want to run a failing business. Come on now, you know that's not fair!

A person's business failing is a personal tragedy of course but it doesn't entitle them to share their misery around. Any viable gap in the market will be filled so it's not like businesses are irreplaceable either.

And whilst that system is abused, many businesses can only afford to pay staff when they need them

So if they are made to pay them when they don't, they'll be laid off.

I don't pay corporation tax, I'm a sole trader. It isn't minimum wage rises that's the issue on its own. It's the lowering of the employer NI threshold, the hovering around doing away with business rates relief for small businesses. At least the Tories were going to reduce my NI bill. I don't get sick pay, maternity pay, holiday pay, pension contributions, on the contrary I have to earn enough to pay those bills for other people on top of everything else. So rather than becoming a fair employer that pays a decent wage to people and treats employees with respect, I simply don't become an employer. Meanwhile people moan they are stacking shelves at Asda for minimum wage for 25 years where no one gives a shit about them.

If people think this isn't going to simply increase every day bills for people then they are stupid. Of course the conglomerates that rule the roost will up their prices and they are supplying the stuff that people actually have to pay for like food and utilities. People will pay the increased amount while demanding another pay rise. The fat cat shareholders get richer and the struggle continues for every other fucker.

If you stop Buy to Let (as the Govt seems to be doing) where are all the tenants going to live? Council houses won't go up overnight (or probably in the right place)

It has to be compulsory because most business owners would pay less if they could. If a business pays NMW then they would pay less if they could. Before these mandated rises most NMW employees had never had a pay rise. Employers can not be relied upon to treat their staff well out of the goodness of their hearts, most must be forced with legislation.

You are hilarious.

As I said, I don't pay my staff minimum wage, I have no desire to. It's nothing to do with not being viable. I said I'm looking to expand not lay people off. Read before you comment.

Did employer NI contributions go up then?

What with? He's only paying himself £1000. If he pays the pot washer even at the lowest rate, he's paying for it out of that £1000 he's paying himself.

It hits a point where the amount of work and hours he puts in make it simply not financially viable for him. He might as well pack up and go work at a multinational, who can then offshore money so it doesn't go back to the tax office.

Dh and I own a small business. The rise in NMW, plus increase in NI, plus the employment rights bill have already changed behaviour with all the other businesses we deal with. It basically means there will be less jobs. Possible higher inflation and interest rates too.

This government are anti business and we all know it. We cannot grow under these conditions, many won't survive at all. We are good employers who invest in the wonderful people we employ. I earn far less than our staff! BUT we will not be able to take on a trainee next year as planned, or replace the employee who is retiring soon. Our suppliers have already increased their prices. The larger companies we rely on will expect to pay us less for more to cover their own costs. One of the larger companies we rely on has announced that they all leaving the UK next year so there will be more competition for contracts etc. It's a mess.

Did you miss my point about relief for small businesses?

Prices do not just automatically rise if labour costs increase. Labour is only one of many costs that make up the costs of a business. Perhaps profits will reduce instead? Or efficiencies made? Or businesses will go under and be replaced if they leave a gap in the market? In any case prices can only rise as high as the market and competitors will allow. Unviable businesses are supposed to go under and be replaced in a Capitalist system. It's sad for the individual business owners but they knew what they were getting into and it is vital for the system to function.

And clearly in their eyes, business owners aren't 'working people'

"I was talking to a small business owner a couple of weeks ago. They are struggling to break even atm. Really sucessful business but they have been hit with loads of wage related increases."

Not that successful then is it?

The state already subsidies many employers. Most people on UC are working but the state has to top up their pay with benefits from them to afford to live. This adds more to the benefits bill then so called " benefit scroungers"

As for they really look after their staff and business will go bust. This is the same pitiful arguments made by the mills when unions were set up.

This company is paying people the minimum they can get away with.....

There isn't much for teens now.

Saturday jobs are rarer than hens' teeth round here

By ‘don’t pay my staff minimum wage’ I assume you mean you pay more - in which case this won’t affect you. And if you can afford to pay them more, so can other businesses.

So the care workers will be out of work...

All our comments are on something we don't know enough about. We know NMW is going up, but don't know the rest of the context of the budget yet. I'm amazed at the number of people who don't think people on NMW deserve to have an increase. It should also help the treasury either way a drop in UC so the money can be diverted elsewhere in the benefits budget. When we know how much inflation has gone up, why think it's unreasonable for people on the lowest income to never get a pay rise?
Whether you think your salary should be higher relative to the NMW is a different question entirely.

But of an attitude on this threat ‘oh I don’t begrudge it but…’ and the assumption that min wage jobs aren’t stressful! This is not the case and it’s not a race to the bottom. So what if someone less qualified gets so much, it’s non of your business just get on with it.

That's what he has to do. Employ only 18 year olds - but what happens when he cant get a suitable 18 year old to apply? The businesses that are community assets or are providing essential services (childcare) will have to close.

Many businesses were financially viable until wages started rising.

I started my business 5 years ago, I was hiring staff at £19k. That same role now is £30k. So I can't afford to hire as many people.

My suppliers have all increased their prices, I used to have £6k a month in costs, it's now £12k per month.

So after I pay all that and work 80 hour weeks, I now take home less than most of my staff, whereas before at least I was a higher rate (although not top rate) tax payer.

If your boss told you to work 80 hour weeks for half the pay because costs had risen, you'd tell them to piss off.

Only the biggest businesses are going to survive this, it will just be people's hobby businesses otherwise, and it's a shame.

Our business helps a lot of people with disabilities and chronic illnesses who get ignored by big businesses, we fight their corner and help them. And we're the only one in our niche who do. It's not always about making the most money when you have a business. But yes I do need to make enough to not lose my home.

Closing because of the NMW? Or closing because of other factors affecting the hospitality sector?

Yanbu. Great for minimum wage staff though.

i remember when I got my first promotion, I was on almost double minimum wage (more actually because of the age link). The pay in my promotion job was frozen shortly afterwards and minimum wage caught up. The promotion job now pays minimum wage and they let go of junior staff, distributing the lower paid work amongst the "promoted" staff for no extra pay.

From my viewpoint, promotion pay over and above minimum wage was supposed to cover the extra responsibility. And then it just had extra responsibility and more work for less than the original perceived value i.e. 50%+ more than minimum wage. Had I still been in that role, I would have looked for alternative employment.

As it stands, I've worked another 10 years had 2 more promotions and still earn 50% more than minimum wage. So more responsibility again and again but without actually being proportionately any better off.

Don't get me wrong, I appreciate the extra money but it makes me wonder where its all going. Especially when my employer always freezes pay at middle management levels to pay for NMW increases (never senior salaries or bonuses.... 🙄)

There are so many factors at play here. When I qualified as a nurse 20 odd years ago, I could have bought a house on one wage, such were the house prices then. My Father retired from the Police not long after I qualified. He was earning just a couple of thousand pounds less per year as a Sergeant, than I do now as a band 5 nurse with 20+ years experience. The little house I was looking to buy once I had saved the deposit, has risen from 32k to 250k, my wage in that time frame has increased by 18K to 34K.