As of April 1st, the National Living Wage was put into place. The change increased minimum pay for employees’ over-25s to £7.20 an hour from £6.70 under the minimum wage, with the national minimum wage rising to £9 an hour by 2020.
But what impact will this have? Does a new national living wage inhibit expansion? Will retailers pass the cost on to customers? Retailers have been quick to respond.
Many small and premium food and beverage operators – such as Costa, Pod – have asserted they will extend the wage-increase to their entire workforce and still maintain the price customers pay. Though some retailers – such as Pret A Manger– have reluctantly had to raise prices on all products sold by 10p to absorb the increased cost.
Fundamentally the NLL has been introduced in-line with inflation and the increased cost of living. Staff are the window – they can be the making or breaking of any business. Being afforded appropriate conditions of work is fundamental.
However it is certainly an additional pressure for businesses. There is very strong implication that it not only adds to a hesitancy towards expansion but also acts as a significant pressure on existing set-ups. A pressure that the Office of Budget responsibility (OBR) declares will lead to closure of thousands of restaurants and 60,000 jobs lost as a direct result of these new measures.
Therefore proving to be a difficult balance.