More than half of employers in the UK support the idea of increasing minimum wage but are urging the government to help businesses adapt to a higher wage floor, according to a new study.
The report, conducted by Learning and Work Institute and Carnegie UK Trust, found that employers do not believe higher minimum wages would have a negative impact on their own business, with 54% saying it would boost productivity in the UK. Just 9% of those surveyed agree with the government's plan to increase national living wage to two-third of median income by 2024.
Unsurprisingly, there was greater concern over the policy among employers that would be most impacted by an increase in minimum wage, particularly in sectors hit hardest by the Covid-19 pandemic. Over half (55%) of employers with higher levels of low pay said the policy would have a negative impact on their business, nearly double the number for all employers (29%).
While half of businesses said they would not need to do anything to respond to a higher minimum wage, some said they would have to make changes which could have implications for consumers and workers., including:
- passing costs onto consumers (22%)
- reduced recruitment (15)
- increase in temporary or flexible contracts (10%)
- reduced staff benefits (10%)