Wholesalers have added their voice to those of other trade organisations in asking the Low Pay Commission (LPC) to freeze the adult National Minimum Wage (NMW).
In its submission to the LPC’s consultation, due to end this week, the Federation of Wholesale Distributors (FWD) said the NMW had risen at a level significantly above inflation in recent years, adding to its members’ cost base at a time of economic stagnation, with no real prospect of sustained economic growth. This would impact on the wholesale sector’s ability to both create and sustain employment, it added.
Calling for the freeze from October next year to prevent wage inflation, the FWD’s submission said: “Employment costs are among the highest costs faced by our members, who are large-scale employers throughout the country, employing more than 70,000 people directly and supporting employment for many hundreds of thousands of people in associated industries.
“With previous increases, employers have tried to apply the same percentage rises to all employees, but this is now too costly for many companies. At a time when some employers have to impose a wage freeze it cannot be equitable for some staff to receive a wage increase of 1.8% through the NMW while others receive nothing.”
FWD chief executive James Bielby said: “Our members support the minimum wage but annual increases affect the whole pay structure, not just those earning the NMW. As profit margins are currently static at best, and costs continue to rise, the NMW has significantly eroded the relative rate of pay our members are able to offer.
“Further rises above the rate of inflation would force wholesalers to either cut back on hours and staff or increase prices, which would have knock-on impacts on the thousands of retailers, caterers and SMEs they serve. While it’s important that workers receive a fair wage for their labour, it’s also important that companies like our wholesale members and their SME customers are able to offer the employment that allows them to earn that wage.”
Earlier this week the Association of Convenience Stores also called for the NMW to be frozen while unveiling a survey that showed 82% of convenience retailers would support a freeze, 80% were reducing staff hours, 78% were increasing the number of hours they worked and 67% were delaying expansion or investment.