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In response, the Association of Convenience Stores (ACS) has warned about the affordability of the increase and called for a pause on future increases if they’re shown to be damaging investment and employment prospects.
ACS chief executive James Lowman said: “A National Living Wage of £11.44 from April reaches the Government’s long standing target of reaching two-thirds of median earnings by 2024. This will be tough for many local shops to afford, having struggled with a cost of doing business crisis for nearly two years now, and with wage bills the biggest expense for most retailers.”
Findings from ACS’ National Living Wage Survey 2023 have revealed that retailers have already responded to recent increases in the NLW by taking lower profits (69% of stores), reducing staff hours (56%), reducing the amount they invest in their business (50%) and automating certain processes (50%).
In submissions to the Treasury and the Low Pay Commission, ACS has called for the introduction of a mechanism to pause uplifts in the National Living Wage if rates have a detrimental impact on employment opportunities and investment. The criteria set out by ACS for detrimental impact includes:
- A reduction in employment opportunities for low paid workers
- A shift towards more gig economy employment
- A reduction in in-work progression
- An impact on the attractiveness of entrepreneurship
- A reduction in business investment
Chancellor Jeremy Hunt said the minimum wage increase will ‘end low pay’ but he has been described as “deluded” by Usdaw.
The retail trade union said it is disappointed that low-paid workers will not receive a genuine living wage. It said the increase in “the so-called National Living Wage” to £11.44 an hour doesn’t meet Usdaw’s call for at least £12 per hour immediately or the real living wage rates of £12 across the UK and £13.15 in London.
Usdaw is also disappointed that youth rates continue and the union renews their call for an end to rip-off pay for young workers. From 1 April 2024 the National Living Wage for workers 21 years and over will be £11.44 and the National Minimum Wage for those aged 18 to 20 goes to £8.60.
Paddy Lillis, Usdaw general secretary, said: “The chancellor is deluded when he claims that this increase fulfils their manifesto pledge to end low pay for those on the National Living Wage. The real living wage, which takes into account the cost of living, remains over 50p more per hour and better reflects the pay workers need.
“We provided the Low Pay Commission with evidence of why we need a new deal for workers, which includes at least £12 per hour now, as a step toward £15, and an end to unjust rip-off youth rates. While we welcome a pay rise for the lowest paid and the lowering of the age that the adult rate applies, today’s uprating shows that the Government has missed the opportunity to provide the help workers need to get through the biggest cost of living crisis in a generation.
“Going to work should mean a decent standard of living for all workers, not least young workers. They are more likely to be paid less than older colleagues, even when doing the same job. They also often work hours that are not guaranteed in their contract, so they really need fairer and better pay. It is deeply disappointing that minimum wage rates continue to discriminate by age for under 21s.
“I’m afraid today’s uprating shows that the government is not doing what workers need in the face of the cost of living crisis. They have simply failed to understand the scale of the challenge faced by millions of workers across the country. That is in stark contrast to the commitment made by Labour to deliver a new deal when they get into government.”
The Federation of Independent Retailers (the Fed) said the latest increase in the national minimum wage will be damaging to many small stores.
National President Muntazir Dipoti warned that the extra cost could be the tipping point for stores that are already struggling to stay in business in the current economic climate.
He said: “As responsible employers, we want to pay our staff a fair wage for a fair day’s work. However, it should be borne in mind that many small shops are also struggling to cope with soaring costs.
“Unfortunately, there are hours in the day when some retailers do not generate an income of £11.44.”
