The Recruitment and Employment Confederation (REC) recently consulted a proportion of its 14,000 members to ascertain the response to the rise in the national minimum wage to 4.10.
Marcia Roberts, external relations director of the governing body says: At the time of our consultation, none of us anticipated such a large increase. Most REC members could cope with a rise to 4.00, but the increase to 4.10 will cause some real problems for certain sector specific areas such as agriculture, care, food production and catering.
Difficulties arise as a result of regionalisation and differing industries, it is well documented that salaries in the North are less than those in the South. The rise is good news for workers on the lowest earnings but could damage the economy by discouraging employers to recruit, as a result of being unable to pay the minimum wage. This will in turn increase recruitment difficulties in sectors which are traditionally low paid.
This could also result in some job losses for smaller businesses where margins are extremely tight, and only the leanest companies will be in a position to absorb the 40p increase. Further to this, employees who are currently well paid may ask for a further pay rise in line with the 11% on the NMW, this could cripple some SMEs, concludes Roberts.
www.rec.uk.com
REC is concerned at national minimum wage increase - 04/2001
4.10ph to cause problems for employers