Minimum wage hike to go ahead despite coronavirus pressure on businesses
The UK minimum wage is set to rise tomorrow as planned despite calls for the government to postpone the increase due to the coronavirus outbreak.
The National Minimum Wage will increase 6.2 per cent from £8.21 to £8.72 per hour from 1 April, despite the economic challenges caused by the coronavirus pandemic.
However, two thinktanks have argued that the hike will increase cost pressures on vulnerable businesses.
Despite the call for the rise to be postponed, the Treasury has confirmed that it will go ahead as planned.
The Resolution Foundation has urged the government to postpone the increase for six months, while the Institute for Fiscal Studies said the hike could undo the work done by the coronavirus business support package.
Nye Cominetti, senior economist at the Resolution Foundation, said: “The scheduled increase in the National Living Wage to £8.72 an hour will deliver another big pay boost to millions of workers – and represents a landmark moment for a minimum wage policy that the Foundation has long supported.
“But the scale of the current economic crisis puts the latest rise in a new light. Increasing cost pressures for low-paying firms directly affected by the Government lockdown risks pushing them towards making job losses – something we all want to avoid.”
IFS senior research economist Tom Waters added: ” While there is a clear rationale for benefit increases in the current environment, it’s much harder to see a justification for NLW rises, which could undercut the government’s other policies aimed at keeping businesses afloat and avoiding massive job losses.
“The government should seriously consider a delay to the NLW increase, mirroring the temporary rise in benefits.”