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BRC calls for minimum wage controls

The new minimum wage comes into force today, as the British Retail Consortium said that last year’s hike cost retailers £1.7 billion - 13% above expectations.
The BRC has called for a “more measured and predictable framework for future NMW increases” to enable retailers to better manage their wage bills. The adult NMW rises by 3.2% to £5.52 today.

The organisation wants future increases to be guided by increases in median earnings in sectors most affected by the minimum wage and by productivity per person and changes in regulation such as increases in annual leave.

The BRC said that last year’s 6% increase was felt beyond the cost of pay rises to those at NMW level. Retailer’s attempts to maintain salary differentials for those higher up the pay hierarchy, at a time of higher than expected inflation, added £200million to the expected £1.5bn NMW bill.

Between 2006 and 2007 retailer’s total wage bill for shop floor staff rose 12%, three times more than inflation, to £25.8 billion. More than half of the increase was attributed to rising NMW bills.

BRC director general Kevin Hawkins said: “Past minimum wage increases have appeared to emerge from an attempt to balance competing bids from business and unions rather than being genuinely based on economics.”

“Future increases should be guided much more closely by increases in median earnings in sectors, including retail, which are most affected by the minimum wage,” he added.

The BRC warned that the rate of NMW rises had seriously slowed job creation in the retail sector. It said that between 2006 and 2007 UK retailer selling space increased by 5% but employment rose by less than 1%.

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