The impact of the living wage on retailers will be much greater than other industries, according to a new report.
Think tank Resolution Foundation played down fears of the living wage saying UK employers will see their total wage bill increase 0.6% by 2020 under the new legislation but admitted industries such as retail and hospitality will be hit hardest.
The national living wage announced in George Osbourne’s budget will see all employees over the age of 18 receiving £7.20 an hour from April and rising up to £9 per hour by 2020.
According to The Guardian, Resolution Foundation policy analyst Conor D’Arcy said: “Pay rises don’t come for free, and the expected rise will take the wage floor into uncharted territory. But with the economy getting stronger the vast majority of employers should be able to afford the new higher wage floor, which will allow their lowest paid staff to share in the recovery.
Past warnings about the negative effects of the minimum wage on employment have been wide of the mark, but the size of the increase in the new wage floor will certainly be challenging in sectors such as hospitality, retail and care.”