Businesses warn minimum wage rise could threaten jobs and youth hiring
Businesses have warned that a further rise in the minimum wage could put jobs at risk, especially entry-level roles for young people, as Labour faces pressure to ease employers’ costs in the Budget. Hospitality and retail leaders say higher pay, employer National Insurance contributions and other rising expenses are making it harder to hire, retain staff and invest.
The reported 3.9 per cent increase would take the national living wage for people aged 21 and over from £12.71 to about £13.20 an hour, and the rate for 18 to 21-year-olds from £10.85 to around £11.27. UKHospitality says many firms will struggle to absorb the extra cost, while the British Retail Consortium estimates minimum wage rises and employer NIC changes have cost the sector £6.5 billion and 115,000 jobs. Chancellor John Healey has acknowledged a trade-off between minimum wage levels and employment.
In short
- Firms warn another wage rise could put jobs at risk.
- The reported increase is 3.9 per cent.
- Retailers estimate wage and NIC changes cost 115,000 jobs.
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The case for
Businesses argue that another minimum wage rise, alongside higher National Insurance and other costs, could make some roles unaffordable, leading employers to reduce hiring, hours or jobs. They say entry-level and youth roles may be particularly vulnerable, and that easing the cost burden could help firms retain staff and invest while protecting employment.
The case against
Supporters of the rise argue that higher wages help workers meet living costs and ensure people benefit more fairly from the value their work creates. They may contend that employers can adapt through productivity gains or prices, and that weaker pay can itself make it harder to recruit and retain staff.
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Originally published by Daily Mail as “Business backlash over plans to hike the minimum wage as firms say jobs will be at risk”.