Opinion

Living wage a welcome boost for the low paid

Although concerns have been expressed over the impact of the living wage on small businesses, for thousands of low paid workers in Northern Ireland it will be a welcome boost to their pay packets.

It was in the summer budget last year that chancellor George Osborne made the surprise announcement of a compulsory £7.20 hourly rate for those aged over 25 which came into effect yesterday.

So while employers have had a number of months to prepare, it will be some time before the full implications of this decision can be properly assessed.

There have been fears that the wage hike will place yet another financial burden on hard pressed businesses, coming on top of auto-enrolment in a pension scheme and with many facing an increase in rates.

There is no doubt that margins are being squeezed and no one wants to see small operations being forced to reduce workers' hours or make other cuts.

However, it has to be viewed as positive that people on very low pay know they are entitled to a certain wage level which hopefully will continue to rise.

Of course, the Conservative government's wider strategy is to reduce dependence on the state and shift responsibility onto the employer.

Welfare reform has proved a fraught process but in general terms, it is important that someone who goes out to work earns enough to provide a decent standard of living for themselves and their family.

While the living wage is a progressive move, it can be criticised for bringing in a fundamental unfairness with regard to those aged under 25, the point at which the new rate has to be paid.

Someone in the 21-24 age bracket who is doing the same job as a 25-year-old may feel aggrieved that they are being paid at a lower rate.

It is not entirely clear why the government has imposed this age restriction but there is no doubt it places younger workers at a considerable disadvantage and should be addressed.

Clearly, the mandatory living wage is a significant step and it is understandable that some small employers will worry about it having a detrimental impact on their business.

However, similar fears were expressed ahead of the introduction of the national minimum wage and in the event, we did not see the sort of widespread difficulties that were predicted.

It must be hoped the living wage will not undermine traders in Northern Ireland but the improved rates for the low paid will boost the wider economy and improve standards for many families.