Employment Issues

IKEA raises pay for workers, but can small businesses afford to follow?

4015578937_df27c09dd1_bSwedish furniture giant Ikea has become the first large national retailer and household name to sign up to the Living Wage as campaigners try to encourage greater buy-in from employers across the country.

Different to the national living wage announced by the Chancellor in the Summer Budget, the Living Wage is a campaign run by the Living Wage Foundation which aims to secure a better pay packet for employees. Many small, independent businesses operate under the living wage principles, which sees hourly pay rise from the current national minimum of £6.50 per hour for those over 21 to £9.15 in London and £7.85 outside of the capital.

Ikea said:

“Introducing the living wage is not only the right thing to do for our co-workers, but it also makes good business sense. This is a long-term investment in our people based on our values and our belief that a team with good compensation and working conditions is in a position to provide a great experience to our customers.”

George Osborne’s intention to introduce a £7.20 national living wage from April 2016, for those aged over 25, has been met with concern from many sectors, specifically retail. Only today, the Association of Convenience Stores (ACS) with Oxford University’s Said Business School suggested that 24,000 stores could be at risk of closure, along with 80,000 jobs.

Since 1998, balancing pay rates above the statutory minimum wage has been left to individual employers. Whether more employers will sign up to the enhanced Living Wage and follow in IKEA’s footsteps is yet to be seen, but with wholesale increases on the way, smaller businesses in particular may wait to be pushed into making pay rises rather than choosing to jump.

photo credit: <a href=”http://www.flickr.com/photos/40911451@N00/4015578937″>centre commercial Odysseum (MONTPELLIER,FR34)</a> via <a href=”http://photopin.com”>photopin</a&gt; <a href=”https://creativecommons.org/licenses/by/2.0/”>(license)</a&gt;

One thought on “IKEA raises pay for workers, but can small businesses afford to follow?

  1. Pingback: New York’s fast-food workers set for unprecedented pay-rise | Kevin Poulter

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