A Raise in Minimum Wage? It Will Harm Businesses

Let's say Labour has won the 2015 general election.

Ed Miliband's first point of delivery is raising the minimum wage, you all cheer in happiness and glee, but there's something you have accounted for.

The costs of products will also rise.

Let's say a large company like Tesco's. who have 472,000 people working for them, I'd imagine quite a few of them are on the minimum wage.

I'll estimate around 45,000 are on minimum wage, which currently stands at £6.31, let's imagine Ed raises the minimum wage up to £8.50, that's £2.19 per person, doesn't sound a lot until you total it up to £98,550.

Now, Tesco's bosses aren't going to sit by, and allow a drop of nearly a £100,000 in profit, so what they will do is raise the prices of their products they are selling.

Basically, we are back to square one.


It'll be even harder for small to medium sized companies, to make ends meet.

Let's say you own a small engineering company, you're struggling to find work because people just can't afford it, especially as we are just starting to head out of a recession.

Ed Miliband's has actually acted on a promise, and raised minimum wage. You have 20 members of staff on minimum wage, who are now earning £2.19 more than what they were before.

So you raise the prices of your engineers by £4.00 per person, just so you can make enough to pay them, and your bills, and maybe have a little profit after.

You now have even less custom than what you did before, and the company has folded, putting at least 50 people out of work.

Once again, we are back to square one.

So Ed Miliband's lovely proposal of raising minimum wages isn't as lovely as it first seems, it will effect all of us, and not in a good way!