The government’s decision to raise the minimum wage will cost jobs, retailers have warned.

From October 1, the National Minimum Wage (NMW) for adults will increase from £5.93 to £6.08 per hour. The Youth Development rate will rise by 6p to £4.98 per hour and the rate for 16- to 17-year-olds will go up 4p to £3.68 per hour. The minimum wage for apprentices will also rise from £2.50 to £2.60 per hour.

Low Pay Commission chairman David Norgrove said the increase was “an appropriate balance for the needs of low-paid workers and the challenges faced by businesses”.

However, the Association of Convenience Stores (ACS) expressed disappointment over the increase. “While we support the concept of the NMW, continued increases are putting an incredible strain on small businesses,” said chief executive James Lowman. “This is an insensitive decision that will cost jobs and damage recovery.”

A survey conducted by the ACS in 2010 revealed that 56% of retailers believed that increases in minimum wage had an impact on their business investment plans and 50% believed that they had been rendered less competitive by recent increases.

Cambridgeshire retailer Jonathan James said that the hike would have a detrimental effect on businesses and no clear benefit for employees. “We’ve always absorbed any increases, but it’s not possible for us to do that anymore,” he said. “It’s not just those on the minimum wage who will expect an increase; everyone else will and it will probably lead to a cut in hours, which means that people won’t actually earn any more money.”

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