The Confederation of British Industry (CBI) has called for the next minimum wage increase to be ‘modest’, after a number of above-earnings increases to the UK’s national minimum wage have made it one of the highest in the world, exceeded only by France and Australia.
Following last Monday’s increase to £5.52, the minimum wage has risen by 53% since its introduction in 1999 which, according to the CBI, significantly outstrips average earnings growth of 38.8%.
As a result, the CBI has called for only a modest increase to the minimum wage in 2008 and said that the cost to firms of both increased national minimum wages and new employment rights should be taken into account.
John Cridland, the CBI’s deputy director-general, said: “[But] previous steep rises have loaded extra costs onto employers, who face a less certain outlook for next year as interest rates bite and the world economy slows.
“This year’s increase makes our minimum wage the third highest in the world. The era of continually increasing the numbers of employees covered by the wage should now come to an end – the Low Pay Commission itself acknowledges the present situation requires ‘a more cautious approach’.”