Last month’s announcement that the minimum wage would rise by to £4.10 in October has caused some concern in a straw poll round the textile care industry.
At the Textile Services Association, chief executive Murray Simpson greeted the wage hike with some cynicism. The TSA had always supported the idea of the minimum wage, but the hike to £4.10 was “very political.”
On the edge
Announcing the October rise now, and warning of a “more sustainable” 10p rise next year, at least gave the industry time to prepare.
While he did not think the rise would affect employment, he did believe it was on the edge of doing so.
At the Johnson Service Group, chief executive Richard Zerny said that as far as textile rental, the larger of the two core businesses, was concerned, the increase would have virtually no effect as pay was already above the minimum level.
However, the rise would have some effect on the retail sector. The business covered some 530 shops and currently some make only a small contribution to profit. Some made a loss but had been kept trading, to prevent larger losses. Numbers in both cases were very small, he stressed.
Although the group’s internal research had not been finalised, these marginal shops would be affected and some of them might close. Both Richard Zerny and Murray Simpson made the point that the rise would impact on differentials, a matter of greater concern, perhaps.
Mr Simpson also said that the combined effect of the minimum wage strategy and the employment proposals, such as paid paternity leave, put constant pressure on the industry.
Colin Rowe joint md of Cornish Linen Services, speaking about the laundry industry in general said he was concerned about the strategy and the regional implications were worrying. He was also concerned about the lack of proper consultation with industry bodies.
