- Next chief executive Lord Simon Wolfson warns of “dramatic fall” in entry-level jobs due to government policies
- The minimum wage and NI contributions have increased and zero hours contracts are to be banned
- Brick-and-mortar stores use more automation to reduce expensive employees
Lord Simon Wolfson, chief executive of retail giant Next, has warned UK government policies could cause a “dramatic decline” in entry-level job opportunities, leading to high youth unemployment in the UK and globally.
Wolfson quantified this statement by revealing that the company was now receiving an average of 19 applications per month. every vacancy on the shop floor, up from 10 just two years ago, showing a growing appetite for entry-level roles.
Rising costs and taxes are also to blame for the trend, with rent rises putting extra pressure on businesses and increases to the national minimum wage and employers’ national insurance contributions also increasing costs.
Youth unemployment is rising again
The chief executive said rising costs, driven in part by government policies, have introduced a new “tax on new employment”, making the cheapest workers no longer so cheap. A looming ban on zero-hours contracts only serves to increase costs further, but the government believes this “unilateral flexibility” offers no security for staff.
“The doubling of applicants for retail jobs is a sign of how big the crisis is in youth unemployment right now,” Wolfson said in an interview with BBC.
However, no and short-term contracts play an important role in retail specifically, helping staff during busy holiday periods such as Christmas. Wolfson is concerned that the ban could make the supply of jobs for students and seasonal workers more limited.
“Lord Wolfson, who earned more than £7m last year, will understand how important our measures to make work pay are for the economic and job security of working people,” said a spokesman for the Department for Business and Trade.
But the consequences of cutting entry-level jobs are far-reaching. “The people who suffer the most are the people with the least experience, and they’re the youngest,” Wolfson said, noting that the company has used 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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