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.

I completely agree we shouldn’t have a low wage economy. The job my dd gets paid 21k a year for here would be 90-100k Canadian dollars in Canada. Even allowing for exchange rates it’s a higher wage. But when she goes to Canada to visit her boyfriend everything is double the price 🤷🏻‍♀️. He loves coming here as stuff is so cheap. As wages increase prices will increase. Whether that’s better or not I have no idea.

Wonderful - you're quite happy with people in this country earning a pittance so you can buy your artisan jam and woven goat hair plimsolls locally.

It's OK other people working for a low NMW, just as long as it's not you. Terrific.

https://www.nao.org.uk/press-releases/small-businesses-evading-tax-leave-hmrc-billions-out-of-pocket/#:~:text=HMRC%20estimated%20%C2%A35.5%20billion,%25%20in%202019%2D20).

£5.5 billion last from business tax fraud with small businesses very much part of it. Personally I’d base anger there as opposed to the lowest paid getting a measly 80p rise.

This whole thread just shows how awful the UK has become in comparison to its (former) peers. Wages have been stagnant for almost twenty years now. The problem is not that minimum wage is going up, it’s that wages for better qualified jobs are shockingly low. Average salaries in the UK are now something like £7000 a year lower than in Germany, for instance. Shocking.

the problem isn’t putting the NMW up, the problem is the total lack of investment in the economic, in infrastructure, in building things, in innovation, for the last fifteen years

Well said! The joke is we were told that one of the benefits of Brexit was that we'd all get higher wages, yet here we are trailing behind our European neighbours.

Germany has just gone into recession BTW although I know mumsnetters love to trumpet it as the perfect economy.

In the civil service there are hundreds of staff who will get a payrise because they are currently on less than £12.21 an hour. Stressful customer facing frontline roles.

Because it’s impossible to live on the current minimum wage??

And nurseries can't afford to pay more due to lack of funding. It's a vicious circle, put wages up without additional funding and parents will be asked for bigger top up fees.

But if its rarely increased, people* will not have enough year on year to pay the basic bills. Our fuel bills always increase every year, the food bill gets larger, house repairs, travel costs et al. Basically nothing ever decreases in cost, so for someone on nlw to get no increase for years at a time will mean a couple of years in they won't have enough for basics.

• mainly thinking of those on no benefits as benefits generally and usually increase year on year.

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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 🤷‍♀️

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

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?