Figure more likely to be around the £5.95 mark announces analyst
A leading payroll specialist has challenged the TUC on their suggested minimum wage rise to £6.10 per hour.
Greater Manchester based PAYEpeople has been successfully forecasting minimum wage rises for the last 10 years using specialist payroll software, providing results that many leading firms now use for their own forecasting.
The TUC reported recently that the UK economy has room to accommodate a rise to £6.10 per hour.
The British Chambers of Commerce has a different point of view and is urging the Low Pay Commission to push to keep the National Minimum Wage (NMW) at its current level this year and until economic conditions have significantly improved.
Director General of the British Chamber of Commerce, David Frost, says: “We’re not opposed to the minimum wage going up when employment is high and the economy is doing well, but when jobs are being lost daily and a recession is in full swing, it makes no sense to increase it.
“Most businesses are prioritising survival. A rise in minimum wage would not help firms hold on to staff but would simply add to unemployment.”
TUC general secretary Brendan Barber said: “The minimum wage has never had any detrimental effect on the UK economy. In the current downturn there is a danger that the Low Pay Commission might be too cautious in setting the new NMW rate.
“Everyone agrees that setting it at too high a rate would cost jobs, but people rarely consider the same is true of too low a rate.”
Head of PAYEpeople Allan Pearson says the rise would have significant implications for all businesses and particularly those in the North West.
“This year North West retailers gave employees an average pay rise of 2.4% compared to the UK National Average of 3.8%. The TUC evidence to the Low Pay Commission recommends that the National Minimum Wage should increase to £6.10 per hour, an astounding 6.4% on the current rate of £5.73.
Figure more likely to be around the £5.95 mark
“Our previous experience suggests that most businesses cannot continue to support these kinds of increases. Our data suggests the minimum wage should increase by a further 3.8% to a more manageable £5.95 per hour. I also believe that the adult rate will start to apply to workers from the age of 21, currently this is 22.
“We expect the new figure to be more in line with these forecasts”.
Whilst Mr Pearson says he disagrees with the proposed hike, he is behind the government for their recent efforts in enforcing the minimum wage.
PAYEpeople is an outsourced payroll services provider and has helped national companies save as much as 20% of their processing costs.
Current Minimum Wage
Over 21s: £5.73 an hour
18 to 21-year-olds: £4.77 an hour
16 and 17-year-old: £3.53 an hour
From 1 October 2008
For the latest minimum wage rates *click here*
