The CIPD today warns that in recession it is vital that the preservation of jobs takes priority over pay increases. Todayís announcement on the small increase in the minimum wage shouldnít burden employers unnecessarily, but Charles Cotton, Reward Adviser, argues that it could have an impact on younger workers:
ìWe have advised a freeze on the minimum wage in light of the recession, particularly following the 21p increase in 2008, on the grounds that keeping people in work and maximising job opportunities must be a priority. While we support the Low Pay Commission (LPC), we are concerned that this decision will increase the risk of job losses in low paid sectors. This should have been avoided at a time when deflation on the RPI measure of inflation will limit the impact of a National Minimum Wage freeze on peopleís real living standards.
ìOur greatest concern at the moment is for younger workers and job seekers. The Office of National Statistics (ONS) has shown that the recession is having a far bigger impact on employment for young people. In this context, we are pleased that the LPC has not given a disproportionate increase to younger workers.
ìHowever, instead of increasing the minimum wage, weíd argue that energies should be focused on a temporary job creation programme targeted directly at the young unemployed or long-term unemployed. This could operate as a last resort for jobless people for whom the other existing measures have not proved suitable.î
Increase in minimum wage will have a negative effect on those hit hardest by the recession
Says CIPD
