Scottish Business Owners Will Be Hit Hardest by Living Wage Hike
Introduction of the National Living Wage is set to provide challenges for UK businesses in lower paying areas
The upcoming introduction of the National Living Wage (NLW) will create problems for business owners in lower-paying areas, particularly those based outside major UK cities, a new report by think tank Resolution Foundation has found.
The study suggests that the new NLW rate of £7.20 an hour for over 25s – which will come into effect this April will impact 23% of all employees by 2020.
The report also claims that the new rates will hit businesses outside of London and other major UK cities the most, with Scotland set to be the hardest hit.
In Scotland, 33% of Clackmannanshire employees will be affected, followed by employees in Dumfries and Galloway (32%), and East Renfrewshire (31%).
However, employees based in the city are expected to be less affected, such as Dundee (18%), Edinburgh (17%) and Aberdeen (16%).
Employees in other areas such as Sheffield (28%), Nottingham (27%) and Birmingham (26%) will also fare worse when the new NLW is introduced, in contrast to those in Cambridge (15%), London (14%) and Oxford (13%).
Conor D’Arcy, policy analyst at the Resolution Foundation, explained: “While our analysis suggests the pay rise should be affordable for most firms, implementing the new wage floor will be challenging for some employers. That’s particularly true in areas where wages tend to be lower.
“Politicians must work closely with employers to ensure that the national living wage is a success, particularly in low-paying sectors.’’