National Minimum Wage to rise again

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The National Minimum Wage (NMW) for adults is set to rise again this October.

From October 1, 2012 the hourly rate for adults will rise from £6.08 to £6.19 following the government’s acceptance of the Low Pay Commission’s recommendations.

The adult NMW has increased every year since its introduction in 1999 when the rate was £3.60 per hour.

“Our recommendations this year are, as ever, based on extensive economic evidence and take account of the prospects for the UK economy,” said Low Pay Commission chairman David Norgrove. “Although the economy is forecast to grow through 2012 and 2013, the expected pace of growth is uncertain and is likely to be low. We believe our recommendations for October 2012 balance the needs of low-paid workers against the challenges facing businesses, particularly small businesses.”

The Commission decided to freeze the Youth Development and 16-17 year-old rate at £4.98 and £3.68 an hour respectively.

Norgrove said this was to encourage employers to take on more young staff. “The position of young people in the labour market is a cause for concern,” he said. “Their employment prospects continue to suffer more than those of other workers. Our recommendations to freeze the youth rates were made reluctantly, and may help to increase the relative attractiveness of young people to employers.”

The Apprentice Rate will increase from £2.60 to £2.65 per hour.

Association of Convenience Stores (ACS) chief executive James Lowman welcomed the government’s decision to freeze the youth and development minimum rates but warned that another increase in the adult minimum wage rates will hit retailers hard.

“Our research has clearly shown that retailers have little choice but to reduce staff hours and delay further business investment when the minimum wage is increased,” he said.

The ACS had previously called on the Low Pay Commission and the government to freeze the adult national minimum wage rates for 2012-13. It estimates that the actual cost per hour to a retailer for a full time employee will be £7.23 per hour when holiday entitlement and national insurance contributions are taken into account.

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