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Letter: US lesson on wages

Sir: Jonathan Fry (letter, 6 October) seems unaware of the basic economies of employment in Britain's small businesses: that if you don't earn enough money to pay a minimum wage then you either have to sack people or not employ them in the first place.

We are often told that the minimum wage system works in the US. What is not stated is that exemptions exist for firms whose annual turnover is less than $500,000 (75 per cent of all UK firms have an annual turnover of less than pounds 100,000), and firms that employ fewer than 15 people (93 per cent employ fewer than 10, while 97 per cent employ fewer than 20).

In other words, just about every small business in the United States is exempt from the legislation. In any case the minimum wage level is set so low that the majority of firms already pay well over that figure. Failure to treat small businesses in the UK in a similar manner will result in massive unemployment in this sector.


Federation of

Small Businesses

London SW1