National living wage blamed by employment group for jobs market ‘shockwaves’

Picture: Gareth Fuller/PA Archive.

Picture: Gareth Fuller/PA Archive. - Credit: PA

The jobs market is at its least optimistic for three years, as plans for a new national living wage send 'shockwaves' across the country, according to a new report.

Employment group Manpower said job prospects were 'dwindling' in the run up to Christmas after months of growth.

A survey of 2,100 employers suggested some were scaling back recruitment plans for the rest of the year, blaming next year's introduction of a £7.20 an hour national living wage.

James Hick, ManpowerGroup Solutions UK managing director, said: 'The national living wage is sending shockwaves through the UK labour market.

'An unintended consequence of the introduction of the new living wage is that firms might try to bypass the legislation altogether.

'We anticipate that some employers may look to mitigate the extra costs by taking on more younger or self-employed workers, who are not entitled to the national living wage.

'While on the surface this could be good news for youth unemployment, which currently stands at 16%, it could push a greater proportion of young people into low skilled jobs, resulting in an influx of less experienced workers into social care and other sectors hardest hit by the new legislation.

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'Meanwhile, candidates under the age of 25 have been asking us why it is they will be paid less despite doing equal work.'

Job prospects in the north east, north west and Yorkshire and Humberside are lagging behind the UK average, said the report.

There was a marked divide between job prospects in the north and those in London, showing that the Government's plans to rebalance the economy through the creation of a so-called Northern Powerhouse had so far 'failed to ignite', the report added.