Usdaw says National Minimum Wage increase is good news for the retail sector

Retail union Usdaw says claims that an increase in the National Minimum Wage will cost jobs in Britain’s retail sector are alarmist.

The British Retail Consortium (BRC) claims that a 30p per hour rise in the National Minimum Wage (NMW) to £5.35 coming into force in October will threaten 78,000 retailing jobs but Usdaw says the opposite is true.

“The NMW is good news for retail workers because traditionally jobs in retail were poorly paid but having a legally enforceable minimum totally transformed that picture pushing pay levels up so more and more people are taking jobs in retailing,” says Usdaw General Secretary John Hannett. “This is backed up by independent research by Labour Market Trends that found employment in retail jumped up by 23,000 in the twelve months to October 2005. Add that to the 2.7 million people already working in retail and we’re not exactly seeing a downturn in retail employment.

“The reality is most retailers are comfortable with the rise in the NMW because all the research shows that well paid staff have higher levels of motivation, less absenteeism and better staff retention which more than compensates for any increase in wages.

“Even with the latest increase the average retail worker on the basic rate working a 37 hour week will still only earn £197.95 a week and that’s before tax and national insurance. The latest 30p increase works out at only £11.10 per week or just over £40 a month which can easily be absorbed by a well run retailer.

“Most retail staff are part-time workers, working on average 17 hours a week, so a retailer would only need to find an extra £5.10 a week for those workers which shouldn’t cripple any retail outlet.

“Usdaw regards the NMW as a benchmark and we’ve been very successful in negotiating much higher rates with most of the retailers we work with who are not reporting massive job losses because they pay their staff a decent hourly rate.

“Usdaw commissioned an independent poll of retail workers that found 95% of low paid staff agreed that having the protection of the NMW was very important to them and their families.

Usdaw is making a detailed submission to the Low Pay Commission, who advises the Government on the level of the NMW, arguing for further increases.

“As many of our members rely on the protection of the NMW we will present a strong case to the Low Pay Commission that the current method of formulating the rate works well with no discernable negative impact on the health of the retail sector.

“The BRC are calling for a review of the long-term aims of the NMW in protecting workers from low wages but we are confident a review would only find that the minimum wage has met its central aim of protecting vulnerable workers from exploitation wages.”

Notes to Editors:

• Contacts for newsdesks: Usdaw’s Media Officer, Paul Clarke, can be contacted on 0161 249 2469 or e-mail paul.clarke@usdaw.org.uk.
• Usdaw (the Union of Shop, Distributive and Allied Workers) is the UK’s fifth biggest trade union, with over 340,000 members. Most Usdaw members work in the retail sector, but the union also has many members in transport, distribution, food manufacturing, chemicals and other trades.
• More information and news releases are available at our online Newsroom.
• Journalists can subscribe to receive Usdaw news releases via our online e-news service.

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© 2003 (USDAW) Union of Shop, Distributive and Allied Workers
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