New research shows there is broad employer support for further increases to the minimum wage in the coming years, but that government must help businesses to adapt to a higher wage floor.
The report – based on a survey of over 1,000 businesses conducted at the outset of the coronavirus crisis – shows that over half (54%) support the UK government’s policy of increasing the national living wage to two-thirds of median income by 2024, with fewer than one in ten (9%) opposing this move.
The report – produced by Learning and Work Institute and Carnegie UK Trust – finds that most employers said that the increase would not have a negative impact on their business, or on wider UK employment. A majority (54%) of businesses said that a higher minimum wage could help boost UK productivity.
The report showed that there was more concern among the employers that would be most impacted by an increase in the minimum wage, and among the sectors hit hardest by coronavirus. Over half (55%) of employers with higher levels of low pay said the planned increase in the minimum wage would have a negative impact on their business, nearly double the figure for all employers (29%). Employers in hard hit sectors such as hospitality (41%) and retail (38%) were also more likely to fear a negative impact on their business.
While half (50%) of businesses said that they would not need to do anything to respond to a higher minimum wage, some employers said they would have to make changes which could have implications for consumers and workers:
Most employers believe additional government support would be necessary to help employers manage an increase in the minimum wage. The most popular measure was additional help to invest in skills and training (supported by 37% of employers) followed by a temporary reduction in national insurance contributions (33%). Just one in six (17%) said government should not provide any support to employers.