Booksellers torn over National Living Wage hike tomorrow

Independent bookshops are torn on how the introduction of the National Living Wage tomorrow (1st April) will impact them, with some saying it will be “catastrophic” while others believe it will be a positive move for staff.

The new National Living Wage will come into effect tomorrow and see people over 25-years-old paid a minimum of £7.20 an hour, with this rate rising to £9 by 2020.

Sheridan Swinson, owner of Aardvark Books in Shropshire, has decried the move as a “disaster”, saying that he may be forced to cut employees' hours or shed staff following the move. While the new wage rate may not have much impact in the short term, it will have a “considerable impact” on small businesses in the future, Swinson said, adding that he calculated the move will cost Aardvark Books an extra £12,000 a year. 

“For this area, (nearly) £10 an hour is a lot", Swinson told The Bookseller. "We shall see, but I think we’re just at the beginning now and it’s going to get more painful. It will also affect differentials. People above minimum wage will expect to maintain the differential, so their wages will need to be raised. It’s a disaster. They’ve decided to move from a system of independent adjudication [National Minimum Wage advised by the Low Pay Commission] to a completely arbitrary system. It’s catastrophic. It’s been very bad for small business since the last election. When policies cease to be related to economics and become political diktat it becomes harmful for small business.”

He added: “It’s inconceivable… It’s going to affect parts of the country differently so they should’ve regionalised it. It's really going to cause a lot of problems. The actual living wage [set by the Living Wage Foundation] which the new national living wage is based on has out of London rate and in London rate.”

The living wage set by the Living Wage Foundation is £9.40 an hour for London and £8.25 an hour outside of London.

Uli Lenart, manager of Gay’s the Word bookshop in London, agreed that the move would be difficult for small businesses but said the new rate would be good for staff, particularly in London.

“Clearly, there are two sides to the issue", Lenart said. "I have a special awareness of the financial pressure of living in London – there's a sort of economic gentrification going on which affects the viability of a quality life for writers, artists and creatives. These are the types of people who need to supplement their income by working at a bookshop. It’s only right to give them a decent wage so they can afford to live."

He added: “However, this in conjunction with rate increases for small businesses, is tantamount to an accrual of injuries - like a thousand paper cuts. It’s becoming harder and harder for small businesses to survive.

“Personally, it won’t really affect us as we already operate with a skeleton workforce. We have two people doing the work of six people. We’ve already had to distill our workforce. We use volunteers – mainly students and older people. That’s our model at the moment, so it won’t impact us too dramatically."

Marie Moser, owner of the Edinburgh Bookshop, however, said paying staff the living wage was the “decent and appropriate thing to do” but appreciates it may be difficult for small businesses to implement.

“I pay my staff the genuine living wage set by the Living Wage foundation, which is more than the national living wage", Moser said. "I feel very strongly that if you’re in profit, paying your staff the living wage is the decent and appropriate thing to do. We can’t criticise people who don’t pay taxes and then not pay our staff properly.”

She added: “It isn’t a lot of money, £8.25 an hour, full time is just under £16,000 a year – that’s not anybody’s idea of a highly paid job. In an industry that prizes intelligence and being well-informed, it’s something we all should be doing. I do appreciate it will be a hike for some people, but if you’re in profit, I think it’s the right thing to do."

Like Moser, Peter Donaldson of Red Lion Books in Colchester said the new rate wouldn't affect his business as he already pays his staff higher than the minimum wage.

"The new National Living Wage is a positive thing on the whole, but we don’t have anyone paid below that anyway. We think that the role of bookseller is important and one of responsibility, and we expect more than for them to just take people’s money, so we remunerate them adequately", Donaldson said.

Mike Cherry, national chairman of the Federation of Small Businesses, has argued that while it is easy to say everyone deserves a pay rise, the only way to deliver and sustain higher wages in the long run is to improve productivity, boost skills and drive business growth.

"Without the right type of productivity growth, there is a real risk that in many sectors higher enforced statutory wages will lead to fewer jobs being created, fewer hours for existing staff and, unfortunately in some cases, job losses."

Chain booksellers are also preparing for the introduction of the national living wage tomorrow. While other national companies have warned about the hike impacting on their profits, WH Smith has previously told The Bookseller that wage increases would cost the company an additional yet “relatively small” sum this year, at a little over £1m. “Going forward, it will amount to an annual increase of around 0.5% of our cost base, or £2m to £3m per year,” the spokesperson said. “Clearly, we will be looking to offset the costs using our existing pipeline of cost saving and efficiency initiatives, so it’s very much business as usual for us.

James Daunt, m.d for Waterstones, meanwhile, has said that while the wage increase “evidently has a significant impact”, particularly with the differential with those paid more. However, he added: “This said, I have maintained from the outset that one of my priorities is to raise the pay of our booksellers. Fortunately, this legislative requirement coincides with our ability to do so. Looked at this way, in fact it has no impact, we are making the increases anyway.”