ACS claims minimum wage will hurt local shops

ACS (the Association of Convenience Stores) has criticised Labour’s manifesto pledge to increase the national minimum wage by at least the level of increase in average earnings.

ACS chief executive James Lowman said: “In an uncertain economic climate, with pay freezes in place across the private and public sector it is wrong for Labour to commit to increase the minimum wage for each of the next five years.

“Our opposition is not to the principle of a minimum wage. Every worker should be guaranteed a wage that is fair and prevents exploitation. However a minimum wage should be just that – a minimum below which wages should not fall.”

Labour has announced its manifesto, to be launched today, will include a pledge to require the Low Pay Commission to link recommendations for increases in the wage to average earnings. Up to now, the Commission has made clear that average earnings are one of the factors they consider in their deliberations, but the Commission also uses other indicators and is at liberty to decide on the most relevant measures to use in formulating its recommendations.

Lowman added; “At this time shops are facing increasing energy costs, increasing cost of lending and finance and other employment costs such as additional holiday entitlement and pension contributions. We know from our research that when the minimum wage increases, retailers cut jobs, staff hours and investment, and if we see further increases in line with average earnings we can expect to see more of these cost saving measures being implemented.”

Since the first national minimum wage came into force in 1998, average earnings have increased by 46.9%, inflation by 21.6%, and the national minimum wage by 65%. The national minimum wage will rise by 2.2% to £5.92 on 1 October 2010.

ACS has taken part in each consultation by the Low Pay Commission, including attending with retailers, LPC evidence sessions and conducting research into the impact of the minimum wage on the convenience store sector.