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The impact of the minimum wage rise on business

The impact of the minimum wage rise on business

The government has raised the minimum wage rate. How does this impact business and the people that work for them?

Naturally it depends on many, many factors from the nature of your business and the number of people, to the type of product or service you sell and the type of people who buy it.

Apparently 1.4 million people will be earning 20p an hour more, which equates to a potential £0.5bn extra going into pockets of people around the country. So there’s potentially more spending power at the disposal of those individuals, meaning that more money flows back to some businesses. Meanwhile small business owners with low paid staff may well be hit by increases in wage bill that they may find unaffordable. Equally, this may mean some staff choosing to move on, or even being forced to. For large businesses with many low paid staff this could have a clear and direct hit on the bottom line as it raises the bar for low paid work.

There is much political chatter about this and whether it will impact on the election. I suspect that other issues will overshadow this particular one over the coming months, but what’s certain for me is that the overall state of the economy and the support or not for small business will play it’s part.

Despite the relatively small number at the heart of this matter, the impacts of such macro changes are wide and varied. And invariably they impact individuals to a different degree. Many people won’t even notice a difference at all. Nevertheless, the principle of a reasonable minimum wage is one which needs to be supported to avoid exploitation and in my opinion help a thriving and fair economy.  I’m also a believer in paying a fair rate for apprenticeships and the young, so the change in this matter is a step in the right direction for me.

Any other views on this?