By Marcus Leach

The increase of 2.5 per cent in the National Minimum Wage which came into effect on Saturday is a disproportionate rise which makes it harder for retailers to maintain and create jobs in the current climate according to the British Retail Consortium (BRC).

It takes the adult minimum wage up from £5.93 an hour to £6.08, and the BRC supports the principle of the minimum wage as a basic floor for decent pay but had urged the Low Pay Commission (LPC) to recommend a lower rise which would have been more in line with economic realities.

Most shopworkers earn above the minimum but retail is a labour intensive sector, affected more by rising wage costs than most others.

The LPC is now considering what rise to recommend in 2012. The BRC's latest figures show customers buying less and retail job numbers down on a year ago. Against that background, retailers are calling for an increase of no more than 2.1 per cent next year to ensure the minimum wage doesn't add to the pressures on the sector. This would reflect movements in average earnings over the past year.

More notice of decisions is also needed to help firms manage their budgets. Currently, businesses are told about the change just six months before it happens.

"Supporting jobs in the current climate is essential," British Retail Consortium Director General, Stephen Robertson, said.

"While most retail jobs pay above the minimum wage, increases inevitably push up salaries across the board and make it harder for companies to maintain and expand their workforces.

"The retail sector has a long record of jobs growth but the latest figures show a fall. Retail employment cannot be taken for granted.

"Retail employs nearly three million people and a third of our staff are 25 or younger. Retailers are offering young people their first step on the career ladder and backing that up with training and development opportunities. In support of those efforts we are asking that next year's minimum wage rise is kept at 2.1 per cent or below."

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