The spiralling cost of employment is hitting jobs and investment on the High Street, according to a bleak new report.
As a row broke out over national minimum wage rates for the young, retailers are looking to slash staff hours or even cut headcount.
A survey by the British Retail Consortium (BRC) found 84 per cent of finance chiefs now rank employment costs in their top three worries – up from 21 per cent last July.
Some 61 per cent plan to ‘reduce the number of hours and overtime’ as a result.
More than half (55 per cent) intend to cut head office jobs, while 42 per cent plan to axe jobs on the shop floor.
And figures this week showed unemployment among 16- to 24-year-olds has risen to an 11-year high of 16.1 per cent.
As a row broke out over national minimum wage rates for the young, retailers are looking to slash staff hours or even cut headcount
BRC chief executive Helen Dickinson said: ‘More young people are struggling to get jobs.’ She said ‘this is not surprising’ given the cost of employing an 18- to-20-year-olds rose by over 20 per cent last year.
Labour raised the minimum wage for this age group from £8.60 an hour to £10 in April last year and it is due to go up to £10.85 in April this year.
The hourly rate is also rising for those aged 21 and over but by less as Labour seeks to equalise the two rates.
However, the surge in youth unemployment means this policy is now in doubt.
‘Government is right to be worried about the impact that equalising too quickly would have on employment, as too many young people might lose out on opportunities to those with more experience but the same pay,’ Dickinson warned.
Retailers also face sharp rises in business rates in April and stubbornly high energy bills. There are also fears of worse to come as a result of Labour’s new workers’ rights.
‘The Employment Rights Act is the biggest shake-up of employment rules in a generation, and how it is delivered will make or break job opportunities,’ said Dickinson.
‘Government must go further, reviewing the cumulative impact of the minimum wage, national insurance, and the Employment Rights Act, to ensure, taken together, they encourage, rather than discourage, businesses from hiring young people.’
Shadow Business Secretary Andrew Griffith said: ‘It will come as no surprise that this Government’s terrible decisions are driving down hours and killing opportunities for tens of thousands of people.’
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