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Minimum wage rise is affordable, study says

A new analysis from the Resolution Foundation has concluded that the higher minimum wage which takes effect in April will increase the country's total pay bill by 0.6% by 2020. The study also confirms assumptions that the impact will vary considerably between sectors. Of the 6m workers it expects will gain, 2.7m work in just three sectors: retail, hospitality and support services. But report author Conor D'Arcy said that while 'pay rises don't come for free ... with the economy getting stronger, the vast majority of employers should be able to afford the new higher wage floor, which will allow their lowest-paid staff to share in the recovery'. According to the Resolution Foundation's calculations, businesses with fewer than 10 employees will see a 1.5% rise in their bill, compared with 0.6% for large employers. The biggest impact will come in the accommodation and food sector, which will face a 3.4% increase, it estimates.

 

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