You are here: Rotherhithe \ MINIMUM WAGE HITS £5.73 PER HOUR IN OCTOBER 2008
12 June 2008
- OVER 1M WORKERS will get a 21p an hour pay rise from this October
- 18-21 year olds minimum pay will rise from £4.60 to £4.77 per hour
GOVERNMENT is spending more money to enforce the minimum wage regulations with stiff penalties for employers that underpay their workers.
With a living wage in London of £7.82 per hour the minimum wage even at the new levels is unlikely to be adequate to sustain a family in a major capital city such as London which has a very high cost of living, that helps to keep many families on the breadline and discourages the workless from taking a job. However for many small business these wage increases might tip the balance between staying in business or not during the present trading climate.
London employers can only envy the reported 8p per hour that Tescos are paying their supermarket workers in the Far East.
Economic Crisis Threatens Businesses
The credit crisis sparked by an overheated housing market in the USA spread quite quickly to the UK, causing a run on the Northern Rock and wiping millions off the balance sheets of most banks has yet to really show its potential impact for businesses and future economic prospects.
The initial crisis came about because of the failure of banks to lend to each other because they feared that the other banks were holding large amounts of US origin sub-prime loan secured financial products and would fold like the Northern Rock. Large amounts of central bank credit for banks has helped to shore-up the market.
The remaining question is how long can this situation remain before the world's financial markets go into freefall again, because financial institutions are nursing larger undisclosed losses? The overnight shock of the forced sale of Bear Sterns a major Wall Street player was well managed, but what else is to come?
For the ordinary small business the immediate impact is tightening borrowing requirements and declining consumer demand pushed by the downward pressures on the housing market. In the longer term levels of gearing will help determine business survival but longer term economic growth is forecast to fall below 2%. The falling price of land and the lack of credit for speculative property development will help buyers in the market to acquire good deals on commercial or residential property but will not help rent levels as most businesses have upward only revisions on their leases and may be locked into expensive property as new buyers will not want to acquire relatively expensive existing leases.
In terms of regeneration in Southwark the major impact will be lengthy delays for many major schemes including the Elephant & Castle and the Shard of Glass at London Bridge with many small businesses facing closure in these areas until the developments get underway.
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