Retailers have prophesied drastic reductions in the numbers of shop workers as a result of the minimum wage increases. They are not alone in this. I am chairman of a local arts centre operating out of an old mill building close to Banbury canal. Since taking on this role we have turned a loss-making organisation into one that shows a profit every month and we have achieved this by a combination of careful cost control and mounting a high quality artistic programme as well as maximising all revenue-earning areas. We lose £80,000 of local authority funding after 31 March 2017 and are confident we can manage that loss.
We employ a small but very committed full-time staff team and supplement them with casual labour as and when we need more hands to the pump. Socialists might condemn our zero hours contracts for the casual staff but we have to manage peaks and troughs and unsocial hours with our programme of shows. We pay casuals at the minimum wage but have to supplement the minimum rate with a premium for the holiday pay they would not receive as casuals. Our hourly rates therefore all come in at above the statutory minimum. We can manage this but we face two nasty whammies next financial year from 1 April 2016.
Firstly, the minimum wage goes up for £6.70 to £7.20 plus the holiday pay premium to which I have referred. However, it does not stop there. This increase necessarily impacts on our pay rates for most of our full time staff so there is a knock-on effect which is likely to cost us £10,000 per annum.
Secondly, government in its infinite wisdom requires us to provide for a workplace pension from 1 August 2016. We estimate this will cost us around £10,000 in a full year. It will also add to the administrative burden because casual staff may move in and out of eligibility as their earnings peak and trough, adding to the time needed to manage the monthly payroll.
Most of our staff, full-time and casual are young, single and starting their careers. They all have a commitment to and love of the arts and I suspect most of them are not drawing benefits so are not a burden on the state. The minimum wage may help to reduce the dependency culture by shifting costs to employers but some organisations are better able to absorb such increases than others and the arts sector most certainly is not.
Where are we to find an extra £20,000 per annum? Not by raising our tickets prices for shows or our classes or our room hires or bar/café prices to that extent. We could have done without this added burden at this time but I don’t suppose DC and George had any idea of the impact on local organisations like ours.
