- Chief executive Lord Simon Wolfson warns of ‘dramatic fall’ in entry-level jobs due to government policies
- The minimum wage and IN contributions increase and zero-hour contracts will be prohibited
- Brick-and-mortar stores are using more automation to reduce costly workers
Lord Simon Wolfson, chief executive of retail giant Next, warned that UK government policies could lead to a “dramatic fall” in entry-level job opportunities, leading to significant youth unemployment in the UK and around the world.
Wolfson quantified this claim by revealing that the company now received an average of 19 applications for every opening on the shop floor, up from 10 just two years ago, demonstrating a growing appetite for entry-level positions.
Rising costs and taxes are also to blame for this trend: rent increases put additional pressure on businesses, and increases in the national minimum wage and employers’ National Insurance contributions also increase the cost.
Youth unemployment increases again
The CEO said rising costs, driven in part by government policies, have introduced a new “initial employment tax” whereby the cheapest workers are no longer so cheap. The impending ban on zero-hours contracts only serves to drive up costs further, but the government believes this “unilateral flexibility” does not provide security for staff.
“The doubling of applicants for shop jobs is indicative of how big the youth unemployment crisis is right now,” Wolfson said in an interview with the bbc.
However, short- or no-hour contracts play an important role specifically in the retail sector, helping to staff during busy holiday periods such as Christmas. Wolfson worries that the ban could restrict employment opportunities for students and seasonal workers.
“Lord Wolfson, who earned more than £7m last year, will understand how important our measures to make work pay are to workers’ financial and job security,” a Department of Business and Trade spokesperson said.
However, the implications of cutting entry-level workers are felt. “The people who suffer the most are the least experienced, and those are the youngest,” Wolfson said, noting that the company has employed more automation in stores to reduce its reliance on more expensive human workers.
Next share prices have fallen since the start of the year, down 2.59% year to date.
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