In economically uncertain times, we should strive to remove all blockages to employment, not create more. The national minimum wage is one such blockage. Whilst forced pay hikes may privilege those in work, they make it much harder for those outside the labour market to get their feet on the employment ladder.
In times of plenty, the impact of pricing employees out of the labour market were less dramatic, but in harder times, it becomes a considerable barrier to employment. This is a real problem, and today the government raised the rate by 12p an hour to £6.31 for adults.
Employers, especially smaller businesses with fewer resources, will often be unable to pay the minimum wage. The scale of the rise – a 2 per cent increase, more than 50 per cent higher than current average pay growth – will add considerably to business costs and disincentivise companies from hiring additional staff.
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