The government has accepted the independent Low Pay Commission’s recommendations for this year’s National Minimum Wage rates.
As from 1 October 2012, the adult rate will increase to £6.19 per hour. On the other hand the rates for 18-20 and 16-17 year olds will remain the same.
In this time of uncertainty and tough economic environment, the increase has been welcomed by Cleaning businesses.
The yearly increases on the minimum wage always come with an air of confrontation. As announced by the Low Pay Commission, 2011 will see an increase of 15p, raising the minimum wage to £6.08 per hour.
As stated on their report, “particular groups of workers (women, disabled people, ethnic minorities, migrants and those with no qualifications) are more likely to be in minimum wage jobs”. It is clear how this affects the cleaning industry directly, with 23% of its jobs in 2010 getting paid at the minimum rate (at that time £5.93), where most of their workers come from these particular groups.
London is another story. Although minimum wage jobs account for 2% of all jobs in London, the London Living Wage has been increased this year 45%, leaving it at £8.30 per hour. The Mayor of London, Boris Johnson, considered this a positive move to reduce poverty levels in the capital. There are already more than 100 employers in London that have signed up to the London Living wage, a payment that it is consider the minimum to cover all needs of a worker.
The Living Wage Foundation, which has been battling to extend the London Living Wage to all employers across the capital, welcome this increase although considers there are still hundreds of thousands of Londoners in what it is called “working poverty”.
It is a delicate matter, specially on this current climate of uncertainty that our economy is going through. If you are interested in getting more information, here is the link to the Low Pay Commission report http://www.lowpay.gov.uk/lowpay/report/pdf/Revised_Report_PDF_with_April_date.PDF
Let us know your thoughts.
There was a lot of debate in the domestic cleaning services industry about the minimum wage increase in October 2008, some people saying that it would decrease employment, others saying that it would have little effect.
Interestingly the credit crunch and the recession has diverted people’s discussions away from this debate.
http://www.amycleaning.co.uk is friendly with most other domestic cleaning firms, it is a small industry where everyone really knows everyone . The general conclusion is that in most areas it has had no measurable difference.
This is partly because it is hard to measure in comparison to the general recession of the economy which has had a far larger effect. Also before the minimum wage increased to £5.73, in most areas agencies had to pay a bit more than the minimum wage to get the great staff they needed anyway.
Also as far as individual agencies are concerned, as all their rivals also have to pay more in each area to get staff they are at no disadvantage to their competitors. Cleaners are needed in a specific areas so it is not something where there are competing with those located abroad that are not subject to these laws.
All in all, the challenging marketplace is caused by the current state of the economy and not the minimum wage increase.
The management at Amy Domestic Cleaning Agency Services has been through a few recessions and has always been fine, so we regard it as all just a little history repeating.
It is a sad fact though that many newer agencies do not have experience with these conditions and have not set themselves up correctly for them. Normally the domestic cleaning agency services that are not managing to make it during these conditions are those that do not have proper financial reporting, organisation skills, management experience and biggest of all they have bank borrowings.
If you are a agency that is having troubles, please do feel free to give us a call and we are always happy to chat to and help good people.