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Minimum wage rates for more than a million of some of the most disadvantaged workers will rise to £5.35 an hour from October, the government is expected to confirm.
The increase prompted a mixed reaction from business leaders when it was recommended by the Low Pay Commission last year.
The latest increase follows a rise of just over 4 per cent to £5.05 an hour last year. This followed rises totalling 15.5% in the previous two years when general wage inflation was 8%.
A promise to raise the minimum wage rate was included in Labour's six election pledges ahead of last year's general election.
Unions have said they want to see the minimum wage rate "moving towards" £6 an hour by next year.
Retailers strongly criticised the recommendation to raise rates by another 5.9% when it was announced by the commission.
Kevin Hawkins, Director General of the British Retail Consortium (BRC), warned that it could lead to 35,000 jobs being lost.
The BRC calculated that the increase could add £1.13 billion to industry costs
when retailers are already struggling to cope with sharply rising energy and
property costs.
Mr Hawkins sated: "Most retailers have been cutting their prices and given the
outlook for consumer spending, expect to continue doing so.
"They simply cannot go on absorbing further increases in their fixed costs, of
which labour is one of the biggest."
David Frost, Director General of the British Chambers of Commerce, added:
"Business cannot continue increasing the minimum wage at the pace at which it
has increased in recent years.
"Another large rise will have an adverse effect on employment at a time when
unemployment is on the increase."
Source:
RedAlert
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