The Association of Convenience Stores has warned about the affordability of the rise in the National Living Wage announced by the Government yesterday (November 21).
The new headline NLW rate will rise to £11.44 per hour from April 2024, and will apply to everyone aged 21 and over (was previously 23 or over) and confirms that the Government will meet its target of increasing the National Living Wage to two-thirds of median earnings by 2024.
In response, the 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.
Changes to the rates of the National Living Wage and National Minimum Wage are as follows:
- The National Living Wage will apply to any worker aged 21 or over, and will rise from its current rate of £10.42 per hour to £11.44 per hour, an almost 10% increase
- The National Minimum Wage rate for workers aged 18-20 will rise from its current rate of £7.49 per hour to £8.60 per hour, an almost 15% increase
- The rate for apprentices will rise from £5.28 per hour to £6.40 per hour, an increase of over 20%
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 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