As I See It

Raising wages should trigger more benefits for low paid

Terry portrait with tieLow paid workers will see their wages rise today, though appropriately on April Fool’s Day not all is quite as it seems.

More than a million employees will benefit, but those who may lose their jobs because of it will not regard the new National Living Wage as a laughing matter.

Under 25s miss out altogether on the rise to £7.20 an hour, and some of those on the next rung of the salary ladder may lose out by seeing their differential narrowed.

It also means that any job applicant aged 26 and over will more than likely lose out to a younger person who will stay on the minimum wage of £6.70. Given the prevalence of zero hours contracts and casual labour in general, there is a risk that once they hit 25 they may find their jobs offered to someone cheaper.

Shoppers may also be expected to pay more for goods. Some firms such as Next and Costa Coffee are likely to raise prices. Tim Martin, chairman of pub chain Wetherspoon, has spoken of job losses.

But are these threats and warnings justified? The same gloomy prognosis, notably from the CBI, came ahead of the introduction of the National Minimum Wage in 1998, though evidence that it led to job losses is, at best, flimsy.

The CBI has once again issued a cautionary message, though this time it is a little more measured and focusing mainly on the need for its members to improve productivity, skills and invest in technology to offset the extra cost of labour. Even so, it says some firms “may be forced to reduce hours and benefits for their employees”.

This should be the next target for the legislators. Too many low paid workers suffer the indignity of poor terms and conditions. The recent controversy surrounding Sports Direct is a case in point. But it is not alone.

Scotland’s economy is largely dependent on tourism and retail. But tens of thousands of hotel and catering staff, pub and shop workers are still poorly paid, and receive minimal job protection or benefits.

Too many retailers expect their employees to sacrifice weekends and bank holidays for no extra pay. One of our biggest high street chains has failed to invest in appropriate heating at its flagship store, forcing its staff to wear extra clothing to keep warm. This is while they pay their executives six and seven figure bonuses.

These are not exactly Dickensian conditions, but in 2016 all employees deserve a better deal. Raising the basic wage is a start, but there is more that needs to be done.


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