U.K. Government Considers Freezing Minimum Wage

The government would do so if the wage increases begin to hurt the economy.

April 03, 2013

LONDON – The minimum wage in the United Kingdom could remain steady or be slashed if jobs are cut or the economy harmed, the Telegraph reports. The government told the Low Pay Commission to look into the impact of a higher minimum wage on “employment and the economy” ahead of any future hikes. The requirement will be added to the commission’s new reference terms, and triggers the possibility that the commission would freeze the starting wage or reduce it.

In the United Kingdom, the national minimum wage is usually announced each March by the commission following talks with the government, unions and companies. Last October, the minimum wage jumped from £6.08 to £6.19 for workers older than 21, but hourly employees between the ages of 18 and 20 had their rate remain the same at £4.98.

During the last few years, ministers have pointed out that the minimum wage was beginning to adversely affect employment. “The level of employment is now above its pre-recession peak, but the employment rate is below the pre-recession peak, said Jo Swinson, employment minister. “This means that we believe that caution is required — particularly as the minimum wage rate is now at its highest ever level relative to average earnings for adults, and remains high for young people.”

Convenience stores have long sounded the alarm about the rising minimum wage, saying eight out of 10 stores have reduced staff during the past year. A similar number are urging the freezing of the minimum wage, according to the U.K.’s Association of Convenience Stores.

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