Rising National Living Wage could put hospitality jobs at risk

Rising National Living Wage could put hospitality jobs at risk

The Low Pay Commission (LPC) has been urged to show caution on further increases to the National Living Wage and National Minimum Wage or risk future investment and jobs in the hospitality sector. 

The Association of Licensed Multiple Retailers (ALMR) has submitted to the LPC’s consultation on wage rates highlighting recent cost increases for businesses.

It pointed out that the industry was suffering from tightening margins and continued political instability. ALMR research also showed that the cost of the introduction of the National living Wage on the hospitality sector could be over £1bn.

Research by the ALMR and Ernst and Young forecasted that the sector would be contributing £166bn GVA by 2020, providing an additional 19,000 jobs and contributing an additional £50bn to economic turnover.

But ALMR chief executive Kate Nicholls said that 'unprecedented cost pressures' were eroding eating and drinking out margins and any significant increases in wage rates could threaten investment and put jobs at risk.

“Employers have already had to swallow a significant wall of costs in the form of recent wage increases and continually mounting property costs," added Nicholls. "Any considerable wage increases could seriously limit the sector’s ability to invest in sustained job creation, training and growth.

“Businesses in the sector are committed to developing their workforces, but recent increases in wage rates have not led to increased spend at tills for businesses. Some employers have had to adjust the number of hours they offer staff as a result of increased wages. 

“With uncertainty around Brexit providing only instability for businesses, now would not be the time to drastically increase wage rates. The LPC should act with care if it wishes to avoid risking future investment and jobs in the UK.”

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