British Chamber of Commerce: Minimum wage hike will up unemployment

Fri, 23 Jan 2009

The proposed increase of the national minimum wage to £6.10 would increase unemployment, according to the director general of the British Chamber of Commerce (BCC).

But the TUC claimed recently that the UK economy has room to accommodate a rise to £6.10 per hour.

David Frost, director general of the BCC, says: “We’re not opposed to the minimum wage going up when employment is high and the economy is doing well, but when jobs are being lost daily and a recession is in full swing, it makes no sense to increase it.

“Most businesses are prioritising survival. A rise in minimum wage would not help firms hold on to staff but would simply add to unemployment.”

Brendan Barber, TUC general secretary, says: “The minimum wage has never had any detrimental effect on the UK economy. In the current downturn there is a danger that the Low Pay Commission might be too cautious in setting the new NMW rate.

“Everyone agrees that setting it at too high a rate would cost jobs, but people rarely consider the same is true of too low a rate.”