(23 Sep 2014, 6:18 pm)aureolin wrote Funnily enough, a lot of the reasons are recycled from when the NMW was introduced in 1998. John Major's conservative government argued this profusely throughout the 1997 general election campaign. Although the majority of Tories now agree that NMW was the right decision.
They managed then, and they'll manage again if Labour come to government next May. My only criticism is that we need this now - not in 2020.
The article comes across as neo-liberal scaremongering in my opinion.
Small businesses tend to pay more than MNC's as the cost and time of hiring staff sometimes has an adverse effect on productivity.
Also:
There are alternatives available. Firstly, a negative income tax should be considered. Under this system the government would supplement the wages of the lowest paid employees in order to bring their wages into line with the cost of living. While there may be inflationary repercussions to this strategy it would certainly remove the burden from small and medium sized enterprises and avoid the unemployment consequences outlined above. This strategy, as proposed by Milton Freidman, is untested but is certainly the most likely to succeed in real terms.
What is described above sounds similar to the Working Tax Credit scheme already in place.