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.

@JenniferBooth it is the wannabe rich syndrome lol except I doubt rich people look down at their nannies, good ones are snatched and not going anywhere ahah!!

I used to be permanent band 2 with nhs at my local hospital. The hourly weekday pay has always been minimum wage or very slightly over. The stress level of things we saw and did, combined with full time rota was ridiculous (expected to work a mix of days and nights. Night shift and weekend pay better)
I went onto zero hours and back to freelance equine based work. The hours, pay and stress levels are SO much better! I've had colleagues leave to go and work in Costa, or aldis, because of the pay and conditions! It's sad but understandable 😔

If it affects small businesses, we’ll thats just capitalism. I don’t like it but that’s what we have chosen. If you can’t afford to pay your staff a wage that sustains them then your business isn’t viable. It’s not ok for people to work full time hours but not be able to afford to eat properly or heat their home.

And your answer appears to be to accelerate the problem. Nice work 👍

Unfortunately labour intensive low paid business really struggle. Lots of small labour intensive businesses will close because of the costs. The government doesn't understand this. I own such a business (hairdressing salon) and it is getting harder to keep a pay gap between unskilled and skilled staff. Sometimes I don't even pay myself the minimum wage. In a competitive sector you can only put the prices up so much.

It was a factual comment, it wasn’t an answer
How is my comment accelerating the problem?
This 'new’ information of yours, is businesses will move their operations to China and other countries.It’s already happening, been this case for years.And that was my point👍

And unfortunately this sums it up. Where the skilled/unskilled pay gap is being eaten away at where is the incentive to do well, to work hard?

If business owners are struggling why continue ti run that business? Where prices increase to compensate in places like supermarkets the cost of living will increase, those not being blessed with 6/16% pay rises will feel poorer. The luxuries like eating out, beauty treatments etc, many of which will be done away with, ironically the very businesses likely to be paying minimum wage will then fold.

We have built a service industry economy, many of those services are luxuries. To maintain this there needs to be lots of people earning substantially more than the people whose services they use if they are to continue to be able to afford those services.

Labour has set us off on a downward spiral of economic decline. It’s disgusting!

Or perhaps the lowest paid could be allowed to earn enough to afford to use the products and services they labour over and we could have less inequality. The lowest paid tend to spend their whole pay packet and a greater proportion of that in their local economy.

I posted earlier about how the pay and NI rises affect us.
In our manufacturing business the cost of raw materials is volatile and rose by 50% a couple of years ago, and with the huge rise in the energy costs that come with our industry we have been squeezed tighter and tighter.
We can't pass all the costs onto our customers because they'd go to China or eastern Europe, which does no good for either the environment or the country's economy. Not to mention the risk of losing ever more scarce skills.
When the politicians talk about 'working people' they forget that people like us ARE working (way past retirement age too), and trying our best to keep loyal employees in work.

Unless you live in la la land how do you think this would work? If day everyone earned the same the cost of those luxuries would increase to cover the cost the wages, it would still be unaffordable to those it is currently unaffordable. Those buying those luxuries must earn more than those providing the services earn.

Human society is hierarchical we choose means by which to decide who gets to the top and who is at the bottom- there will always the haves and have nots. Those who have the things society values most will always be at the top of the tree. Those who lack them will be at the bottom. The only way to change the current structure would be to change what we value and therefore who gets most resources. But if we did that we would just change who was at the top and who was at the bottom.

The NHS has just been given 5.5% pay rise. Only last month! Are u honestly saying they didn’t know about the proposed increase?
People working at Band 2 can expect their wage to go to £12.08 hourly! That is below minim wage!
The trusts cannot afford to pay more so in some trusts they have stopped parking fees to make up for it from April onwards until next September when another pay increase will be decided
Some of these people at band 2 will be driving round in their car taking blood tests on behalf of consultants and GP’s to elderly people who need support and cannot leave their house!
And all these people of Mumsnet wonder why the NHS is going worse!

Why don't you rent the chairs out so staff are not employed but self employed? Many hairdressers work on that basis now.

This isn't true because wages aren't the only cost that businesses face so a raise in wages does not equate to an equivalent rise in prices. It's a useful myth that gets repeated so people believe it.

I didn't say everyone should earn the same, I said if the lowest paid are paid more, then they will have enough to actually support the local businesses around them. Those local businesses might find this beneficial because there are a lot of low paid people so it could be quite a lot of business.m

You can't force employed staff to go self employed. It would also be an immediate red flag to HMRC for an investigation. 2 of my staff have been with me for over 20 years. Redundancy would be a lot of money. Rent a chair salons don't pay VAT, or any other payroll taxes. They also don't take apprentices. Many are also disguised employment also.

But then you have no control over your business or the quality and service provided.

There is a place near me that has done this, offer their own course for £2,000 then let them rent a chair, it's almost a MLM. And they can't cut hair.

This isn't true because wages aren't the only cost that businesses face so a raise in wages does not equate to an equivalent rise in prices. It's a useful myth that gets repeated so people believe it.

It isn't a myth. The biggest cost to most businesses is staff, raise wages, and don't forget it isn't just NMW, it is across the board, why would someone supervise on the same pay? Plus the increased employers NI, and the fact it now starts at £5k or course it is going to be a significant increase.

But wages are nearly always by far the biggest cost that a business has. Increase in salary and other costs associated with employment feed into the price set by the business. If we say most people in service industries earn minimum wage then those at the bottom economically would earn the same as those whose services they are buying. So say minimum wage is currently £10 an hour (to keep the maths simple) you use a service that is £100, ie 10x the NMW. This covers costs like ers nic, utilities, tax of the business, supplies (whose costs themselves are largely dependent on exactly the same breakdown) some profit for the owner. The multiple is likely to remain fairly consistent. So we raise that NMW to £20 ph. At the same time we add in an eers nic increase. The costs of that business will also increase so that service suddenly cost £200. Not only is this no more affordable for those at the bottom, some of those who could previously afford it no longer can. The only businesses that benefit are those with fixed costs, but these are very few and likely to be really large businesses who can reduce costs by laying off employees.

Now businesses will absorb some increases. If the increase in the NMW was an isolated cost it might have been ok, but this budget has been a wholesale attack on businesses and entrepreneurs.

I have been reading the threads on here with amazement.

I feel utterly naive - I didn't realise how little people understand about business and running a business. It's been absolutely eye opening.

You should read the similar thread on here that's been busy today. Seems that quite a few people have no clue.

@Blanketyre people can say whatever they want to, isn’t that how it works, on MN.

It is a convenient myth that any increase in wages will be reflected equivalently with price increases that will knock out any benefit of said increase. It is used to keep wages low and workers compliant.

Of course. There are a lot of very uniformed posts on here though but even idiots are entitled to an opinion.

You've just made up an example here and decided that an increase in wages will cause a price of a service to double and hand waved away any explanation as to why that would necessarily follow.

Me too, and I didn't realise that most of them are running businesses according to their comments on here.

More worrying is I didn't realise the complete lack of empathy that so many people have for minimum wage workers, it's shocking.

FGS Norman I gave you a clue, have you lost it already?