How Labour’s minimum wage plan could cost you YOUR job and send unemployment soaring

The Labour Party held their annual conference in Brighton earlier this week, with Shadow Chancellor John McDonnell announcing Labour would raise the minimum wage to £10 per hour by 2020 for all workers over the age of 18. The minimum wage as of April 2019 for employees over the age of 25 was £8.21 per hour, according to figures from the UK Government.

It’s time to end this discrimination. Young people’s work should be properly valued, not exploited by employers to cut their wage bill. If they’re doing the job, pay them the wage – the real living wage

Jeremy Corbyn

The plan was muted in May, and speaking at a party gathering in Birmingham, Jeremy Corbyn said: “It’s time to end this discrimination.

“Young people’s work should be properly valued, not exploited by employers to cut their wage bill. If they’re doing the job, pay them the wage – the real living wage.”

The rates are reviewed each year by the Government, which is advised by the independent Low Pay Commission, made up of trade unionists, businesspeople and academics.

But political experts have lashed out at the plan, warning it would send unemployment soaring and drive business costs up by as much as 25 percent.

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Jeremy Corbyn’s plan to massively increase the minimum wage for workers has been savaged by critics (Image: GETTY)

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The Labour Party leader initially announced the plan in May (Image: PA)

Unemployment rates in the UK have been plummeting steadily over recent years – from 8.4 percent in October 2011 to 3.8 percent in May 2019.

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James Roberts, political director at the TaxPayers’ Alliance, told “Taxpayers will also be wary of politicians promising to set pay.

“Raising the minimum wage to £10 per hour, and pulling under 18s into it, would punish people looking for part time work, squeeze small firms and could cost young people their jobs.

“With these policies, you get the impression McDonnell won’t be satisfied until the FTSE 100 shuts up shop and we’re back to huge unemployment and a three-day week.”

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Jeremy Corbyn has given the thumbs up to a number of Labour policy plans (Image: PA)

Len Shackleton, editorial and research fellow at the Institute of Economic Affairs think tank, warned the policy could leave millions of young people out of work and destroy all the hard work done to get unemployment levels to record lows.

He told this website: “Government intervention in labour markets may damage the most vulnerable. If minimum wages rise sharply, and more jobs are automated out of existence, there will be fewer jobs at the bottom end of the labour market.

“Employers will be able to be more choosy about whom they employ. They will tend to avoid young and inexperienced workers, those whose spoken English is poor, women who may have child/elder care demands, those with poor health records.

“The UK labour market in recent years has shown remarkable resilience, with unemployment at very low levels and employment at record highs.

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John McDonnell repeated Labour’s plan at their party conference (Image: GETTY)

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John McDonnell and Jeremy Corbyn have made several announcements around Labour’s policies (Image: REUTERS)

“I would expect these and other interventions planned by Labour (such as greater trade union rights) to worsen this performance, meaning more people out of work and higher taxes. It is difficult to see this having a positive effect on UK growth and living standards.”

James Heywood, Senior Researcher at the Centre for Policy Studies think tank, claimed raising the national minimum wage has already proved to be disastrous for jobs market.

He told “The Government has already increased minimum wage rates for most workers above inflation in recent years through the National Living Wage.

“When this was introduced, the Government’s own analysis estimated it would have a negative impact on employment levels, and Labour’s policy would take this to another level.

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“Because rates are set at a national level, most of this impact on jobs will be felt in less affluent regions such as the North East where the real terms cost of a £10 minimum wage is substantially higher than in the South East.”

Matthew Lesh, head of research at the Adam Smith Institute think tank, added: “Raising costs to businesses is a serious threat to Britain’s historically low unemployment. It will end up making us less competitive, hurt smaller businesses, and cost taxpayers more in higher dole payments.

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“Study after study has found that jacking up the minimum wage leads to fewer job opportunities and lower take-home wages, particularly for lower-skilled, younger and minority workers.”

Businesses are also fearing the worst, warning it could send labour costs surging by up to 25 percent, warning it could destroy small businesses.

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Jeremy Corbyn is waiting for his opportunity to become Prime Minister (Image: GETTY)

Christine Telyan, chief executive and co-founder of London-based technology company UENI, told “This represents a 20-25 percent increase in labour costs, which makes it really difficult for small business owners to afford such increases, even if they support the measures in principle.

“We don’t want small businesses going out of business or reducing head count because they cannot make ends meet. It would make sense that larger companies bear a greater responsibility in financing such measures than smaller ones.

“As a country, we also need to make sure that any increases in labour costs are offset by productivity gains so that this doesn’t translate into price spikes for goods and services for consumers.”



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