Today, the Government's new National Living Wage of £7.20 is, by law, positively impacting the salaries of around 4.5 million people in the UK.
For those currently earning the National Minimum Wage, this equates to an extra £20 a week, almost £1000 a year. That's a 7% salary increase. This top-up may not sound life-changing for some, but it could be the difference between a single mother having the ability to do something nice with her daughter or son one evening a week, or not.
That extra boost could cover a family's council tax bill or pay for for their first family holiday.
Putting a price on material things may not be the best way to explain the benefits of a Living Wage, but it certainly does help us put things into perspective.
As a businessman, of course I am fully aware of the consequences that wage increases will inevitably have on businesses up and down the country. I can especially appreciate the concerns of small business owners, whose main worries surround enforcement of unemployment amongst their teams. We've all seen the statistic; it's feared 60,000 jobs could be lost due to the emergence of a Living Wage.
My dispute with this premature forecast is its reliance on the unknown. We're all scared of what 'could be', we're afraid of change and scaremongering statistics like this just intensify those feelings. However, what puzzles me most is employer's reluctance to give their employees a wage they can live on. That's the point here. It has been proven that the current National Minimum Wage does not provide enough capital to live on. People aren't asking for a lot here, they are literally just asking for enough to survive.
The fact this is called the 'living wage' should be enough for all employers to understand this isn't just a 'nice to have' – it's a necessity.
The way I see it, business owners face price increases on a daily basis. We're also all dealing with the worry of increased unemployment, but we would face these worries regardless of whether the Living Wage were being introduced, or not.
If we decided we could no longer afford to pay our business taxes, what would happen?
This is all about innovation. Increase your productivity, improve your business functions and wage increases shouldn't be an issue.
Employee salaries should be on top of your priorities list, they should not be an inconvenience. Your business cannot run without its people, so why are we so reluctant to provide them with a salary they can actually live on?
If, after analysing your business' productivity you're still sure a 7% wage increase will be disastrous, I'd begin to question how viable the business actually is. If the only way your business can survive is by employing people who earn less than they need to live – that's not a sustainable business model.
Many critics of the National Living Wage argue that it will increase competitiveness in the market, especially for low skilled workers. Firstly, I want to eradicate this term 'low skilled workers'. When we refer to these workers, we're referring to employees who impact our daily lives; they're our shop assistants, our hairdressers, our nursery nurses, our care home workers and baristas and they deserve our respect.
This leads us to a UK jobs market which is better paid, better skilled and more competitive, for employees who feel more appreciated and more valued by their employers.
These workers need to have exceptional communication, timekeeping and teamwork skills. They need to possess the best soft skills, and these should never be overlooked or taken for granted.
By introducing a Living Wage, we are professionalising these jobs. Competitiveness will increase, but so will employee motivation and determination to succeed.
As for businesses, employee retention rates will improve as you increase your productivity and develop employee morale.
This leads us to a UK jobs market which is better paid, better skilled and more competitive, for employees who feel more appreciated and more valued by their employers. Not only this, I also believe the economy will reap the rewards of a Living Wage.
When someone doesn't earn enough to live, they rely on extra funding from the state. If you give someone who currently earns this salary a top-up, it's more likely they're going to spend that extra cash within the UK, therefore it's recycled capital.
I accept the potential compensations our new Living Wage could hypothetically inspire, however I am an avid supporter in ensuring our workforce earns a fair wage and are not too blinded by struggle to unearth opportunities.