The Low Pay Commission has been urged to take a cautious approach to setting future National Living Wage (NLW) rates in a submission by the Association of Convenience Stores (ACS).
Tahe ACS called on the Low Pay Commission to recognise the challenges faced by businesses, including local shops, as a result of the cost of living crisis and increased operating costs.
In April 2023, the National Living Wage increased by 9.7% from £9.50 per hour to £10.42, in line with the government’s target to reach two-thirds of median earnings by 2024.
Findings from ACS National Living Wage Survey 2023 have revealed that retailers have responded to the 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%).
ACS chief executive James Lowman said: “The convenience sector is a prime example of genuine two-sided flexibility in the labour market, providing local, secure and flexible jobs to hundreds of thousands of people across the UK.
“It is important that future wage rates are approached with caution, set independently of political targets and that decisions are made in the context of the economic climate. An ‘emergency brake’ mechanism to suspend uprating when wage rates have a detrimental effect on employment opportunities could prove crucial.”
ACS has put forward a number of factors which would signify negative impacts on the economy and the labour market, which could trigger the ‘emergency brake’, these include: limited in-work progression, decreased attractiveness of entrepreneurship compared to employment and adoption of gig economy models.