National Living Wage Comes Into Force

Source:   —  April 01, 2016, at 8:28 AM

Business leaders declare productivity could suffer as minimum pay is raised, while unions declare they wish the scheme expanded.

National Living Wage Comes Into Force

Millions of workers will be paid more from today as the new national living wage becomes compulsory.

The rate that everyone over the age of twenty-five can expect to get is £7.20 per hour, an expand of 50p per hr on the previous minimum wage.

But the new wage has attracted criticism with unions saying it's not objective that those under twenty-five will miss out, and business groups saying it could hit productivity.

TUC common secretary Frances O'Grady said: "Britain desperately needs a pay rise, and this expand is excellent news for those aged twenty-five or older.

"But the Government should ensure that younger workers aren't left behind. twenty-one to 24-year-olds won't be seeing an increase.

"This isn't fair. Future wage increases should narrow the pay gap between elderly and young."

But Doctor Adam Marshall, the acting director common of the British Chambers of Commerce, said: "The Government'south new living wage will apply a ratchet effect to all companies' pay bills, and sits alongside a raft of other high employment-related costs.

"While many companies have the skill to expand pay, others will struggle to do so alongside pensions auto-enrolment, the apprenticeship levy, employer National Insurance contributions, and other up-front costs.

"Some will have to distract money from training and investment to expand pay, which could damage their productivity. Others may stop hiring altogether."

The Government'south aim is to expand the living wage to £9 an hr by two thousand twenty, a move that's likely to affect an estimated nine million workers.

Research by the Resolution Foundation found that more than a quarter of employees in the Midlands, Wales and Yorkshire and the Humber will benefit, compared to one-in-seven workers in London.

Labour accused the Government of performing a stunt on the British people by giving with one hand and taking far with another.

Shadow work and pensions secretary Owen Smith said: "It'south a typically cruel sleight of hand from the Tories to introduce their version of the living wage with one hand, while taking five times as much in cuts to Universal Credit and Tax Credits with the other.

Josh Hardie of the Confederation of British Industry said: "For wage increases to be sustainable they should go hand-in-hand with productivity growth.

"If the living wage doesn't obtain this balance right it'll risk being unaffordable for many firms. Smaller businesses and those in key sectors love hospitality, retail and care are likely to be particularly affected."

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