As of April 1st, the National Living Wage in Northern Ireland has increased, reaching its greatest rate at £11.44 per hour for those who are 21 and over. In regards to this, one in eight workers in Northern Ireland is anticipated to be affected by the minimum wage rise, thereby providing a more significant pay increase for those who previously had to be 23 years old to qualify. The rate increased from £10.42 an hour to the current figure of £11.44 per hour, offering larger wages for those working in social care, childcare, hospitality, and other low-paid industries. Yet despite this good news, some businesses have warned of an oncoming “perfect storm” of cost pressures.
This is beneficial for the economy, especially to the Northern Ireland economy, where low pay has been an issue, according to Dr Lisa Wilson of the Nevin Economic Research Institute. The monumental rise has led to a decrease in employees classified as low-paid from about 20% of the labour market to an estimated 12% of workers, providing beneficial outcomes on the local labour market. However, businesses such as the Common Market bar have noted that the wage rise, along with increases from breweries and suppliers, high energy costs, and VAT, is generating a “perfect storm” for the hospitality industry. Michael Stewart, the director of Common Market bar, stated that while everyone deserves a fair wage, costs must be paid for somehow.
The increase will impact those who work above the National Living Wage; still, employers who have pledged to maintain this payment differential will also be affected, causing employers such as the Common Market bar to make significant decisions. The wage increase will require payment for somehow, and in cases, it may be passed onto customers, resulting in increased prices across the board. As previously mentioned, some businesses have warned of the “perfect storm” of cost pressures, which could lead to a considerable increase in prices in hospitality and other low-paid industries.
On the other hand, the minimum wage increase and its monumental impact on the economy have decreased low-pay classification within the labour market, proving successful for the Northern Ireland economy. Regardless, the cost increase will be felt across the nation, and it will be intriguing to see how businesses respond to this change, whether it be through tax cuts or increased prices on a variety of services
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