Living wage hits businesses

Living wage increases impact bottom line A survey from the Federation of Small Businesses (FSB) reveals that four in 10 SMEs are raising their prices as a result of having to pay higher wages. The FSB said business owners were also forced to pay themselves less, hold back investment and reduce staff hours in an attempt to absorb inflation-beating wage rises. "More than half were paying all staff the current national living wage before they were obliged to do so - an even greater proportion were doing so in the smallest firms," said Mike Cherry, FSB national chairman. He added: "We're now seeing more small business owners than ever saying that living wage increases are impacting the bottom line. Their first instinct is usually to take the hit personally, paying themselves less rather than cutting staff.”