Employers warm towards £5 minimum wage

Jan 25 2005 by Nic Paton Print This Article

Nearly half of employers want the minimum wage to rise to £5 an hour, a study has suggested.

Research by the magazine IRS Employment Review found nearly a quarter of firms thought its present level of £4.85 an hour was the appropriate rate, while another quarter thought it should be above £5.

Rather than the widespread hostility widely predicted to the wage when it was first introduced, it appears employers have by and large come to accept it.

Just a very small minority - 1.6 per cent - thought it should be below £4.85, with fewer than one in 10 believing that there should be no set minimum rate at all.

Almost half favoured linking the wage to inflation and a third thought any increases should be kept in line with average earnings.

IRS Employment Review pay and benefits editor Sheila Attwood said:

“While a quarter of the respondents who stated that the adult minimum wage should be above £5.00 an hour are from organisations whose minimum rate is currently at £4.85, many organisations told us that pay increases to accommodate the NMW were funded out of company profits or through increasing prices.

“This suggests that while there is support for more uplifts, many organisations have few surplus funds available to absorb the cost of rises above the rate of inflation,” she added.