Hackney business owners split over new ‘National Living Wage’
- Credit: Archant
Hackney’s small business owners are divided over George Osborne’s new “national living wage”, brought into force this month.
Workers over 25 must be paid £7.20 an hour, rising to £9 an hour by 2020 – effectively an increase in the minimum wage that was previously £6.70.
The “national living wage” is unrelated to the Voluntary London Living Wage Foundation’s recommended hourly rate of £9.40 an hour. More than a fifth of Hackney’s workforce earn less than this higher figure.
The East London Trade Guild’s Krissie Nicolson claimed the new law would negatively affect start-ups.
“Although we condone paying the London Living wage,” she told the Gazette, “the compulsory National Living Wage will have a detrimental effect on a number of small businesses, especially when they are starting out.”
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Jens Harder, who owns Well Street Kitchen, said he couldn’t “even bear to think how the business would have got off the ground if the minimum wage was £9 an hour”.
“If I had the option of two people applying for a position, I might look more favourably on employing the under-25 because I wouldn’t need to pay them as much,” he added. “I had a quick check and all my baristas are under 25 but sometimes I do employ kitchen porters [who are] a bit older.
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“I might have to resort to hiring under-25-year-old kitchen porters now, which is a terrible repercussion because it’s those guys who most probably have families to support.”
The phased-in compulsory wage increase was announced in last year’s autumn statement to offset cuts to housing benefits and working tax credits, effectively transferring support for low-income workers from government top-up schemes to employers.
Tim Sperryn, owner of BL_NK in Curtain Road, said he always paid staff of all ages a rate above the Voluntary London Living Wage.
“It’s important that [my staff] have enough money to live in London,” he said. “I benefit with a very low sick rate and happy staff who over-deliver. You can’t cut the engine room to be more profitable at the top end.”