Living wage too high for shops

IN RESPONSE to the feature on the living wage by James Kelly MSP (Another Voice, 4 May), policy and decision makers must realise that the impact of the living wage will vary substantially by industry sector.

Large financial services companies, for example, are likely to see their wage bills rise by only around 1 per cent if they adopt the living wage, while firms in low wage sectors will see their wage bills rise by five or six times as much.

When increased employers’ national insurance contributions are factored in, a living wage of £7.65 easily turns into a going rate of almost £9 an hour. Staff salaries are always the highest costs our members face. Trading conditions are likely to be challenging for the foreseeable future: local shops simply cannot absorb the additional cost of a living wage and jobs will be lost and hours cut back.

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As the economic recovery remains fragile, our key concern is to protect jobs and encourage investment. The living wage must be advanced solely through an incremental and voluntary approach – surely Mr Kelly would agree with this.

John Drummond, chief executive, Scottish Grocers Federation, Edinburgh

JAMES Kelly makes a persuasive case for the living wage. Whilst the social justice benefits for the policy are obvious, it is critical that the clear economic case for the living wage becomes common knowledge. That it can be linked to improved job performance and reduced absence should be of interest to any employer.

It shouldn’t really be rocket science – pay people better and see better results – but it is understandable that business would need to be persuaded on this. That a number of major employers have backed it thus far is good news, and the economy should hopefully see the benefits of this.

The move to deliver it to public contracts is key in this ongoing campaign. By requiring private companies to pay the living wage in their publicly funded contracts it normalises it and allows them to see the benefits of doing so. I hope this move is supported, as the Scottish economy will see the benefits of delivering better pay to workers.

AD Moffat, Rutherglen