The British Chambers of Commerce is warning against a sharp increase in the national minimum wage, arguing that salary increases for low-level staff could significantly raise costs for employers.
BCC director general David Frost explained how employment hierarchy within companies makes it difficult to implement minimum wage increases.
"Through any companies you have got different skills and different abilities of people and there are different levels within an organisation," he told the BBC. "If you increase the minimum wage at the bottom you are going to have to raise the differentials, and clearly that is significantly to the costs of business."
Mr Frost's comments come as the TUC calls on the Low Pay Commission to raise the current level from £4.85 to £5.35, with a view to moving towards £6 by the end of 2006.
TUC general secretary Brendan Barber stated: "There is no economic argument against continuing to increase the minimum wage above inflation and the growth in earnings, "adding:
"There is a very strong case for ensuring that up to two million low paid workers get a pay rise over the next two years, not a pay cut."
These proposals have been described by the BCC as "totally irresponsible".
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