NFRN warns job losses over minimum wage increase next year

Photo: DANIEL SORABJI/AFP/Getty Images

Increasing the National Minimum Wage will seriously harm smaller businesses looking to recover from financial difficulties caused by the Covid-19 pandemic, the Federation of Independent retailers (NFRN) has said.

Responding to a consultation by the Low Pay Commission on the 2022 rates, the NFRN said the closure of non-essential stores had a devastating impact on news and convenience retailers in high street locations and transport hubs, as footfall disappeared overnight, despite being classified as “essential” and permitted to remain open.

At its peak, around 8 per cent of the NFRN’s membership was forced to close due to lack of customers, staff shortages or concern about the risks of infection, the trade body noted, adding that some of these stores have still not reopened.

“Our members believe that those who work in retail should be paid a fair wage for their work. However, recent increases in wage rates have cost jobs in the retail sector, as businesses have struggled to absorb the increases in their wage bill,” Stuart Reddish, NFRN national president, said.

“The result has been business owners, who are not subject to the minimum wage, have sought to cut costs by taking on additional hours themselves. Many now effectively pay themselves less an hour than they pay their staff.

“The NFRN therefore calls for the commission to give retail a chance to recover from the pandemic by limiting any recommendation of a rise in the national living wage to not more than the increase in the rate of inflation.”

The Low Pay Commission, the independent body which advises the government on the levels of the National Living Wage and National Minimum Wage, will make the recommendations this autumn on the 2022 minimum wage rates.

The commission’s current projection for next April’s National Living Wage rate is £9.42, with a likely range of 7 pence above or below this figure. This year, the rate increased to £8.91 and the age threshold for the rate reduced from 25 to 23.