Could raising the minimum wage hurt NI?

Last week the Tories did do a masterful job of combining their message of a growing economy with fairness by arguing that the minimum wage should rise from £6.31p to £7 per hour.

As the IMF pointed out today prospects for the British economy are looking better but we have to remember that Britain is hardly enjoying a balanced recovery as most of the job creation still goes on in the South-East of England.

In Northern Ireland, where we currently have lower wages than the rest of the UK anyway, the minimum wage rise was generally welcomed by political leaders but have we stopped to think about the businesses, most whom are small businesses who will have to pay an increased wage?

In his view from the chair column in the Newsletter today the Chairman of the FSB in Northern Ireland, Wilfred Mitchell puts the case forward arguing that

The minimum wage should be just that – a safety-net level of payment that ensures workers are not exploited, but it should be not set at such a level as to see it destroying jobs and businesses. If the south east of England is experiencing a boom as the economy bounces back – something we should all welcome – we should rely not just on regulation but also on the market itself to play its part in finding the right level of wages for employees.

He went further arguing that we need to be cautious about hurting the recovery

If we lift the safety net higher, without regard for the economic health of the least-well performing regions, we will snuff out much of the tentative growth in those areas and see further centralising pressures driving more economic activity to the south east, further weakening the other regions.

This piece did give me some food for thought today as I watched this debate over the past week-governments can help in raising the minimum wage but at the same time I think about my local shops who are not exactly rolling in cash who will have to pay this.

I would love to see people enjoy higher wages but then again wanting something and making it a reality are two different things.

Maybe there is something I’m missing here?

 

David McCann holds a PhD in North-South relations from University of Ulster. You can follow him on twitter @dmcbfs