Increase in Minimum Wage Will Cause Ceiling Crash

The increase in minimum wage is welcome; If we're able to keep our jobs that is.

After all putting all the economic heavy lifting on small business employers isn't really a wise move. The SMEs are already struggling and those that are not one-man-bands will struggle to employ people with the rise in minimum wage coming after a rise in employer's National Insurance.

I suspect the unemployment rate will increase come the spring. 

But I foresee another unintended consequence of the rise. The crash into teh ceiling of lower management levels.

For instance the wife is a senior care assistant. She is in between the normal care assistant and the care manager.

The new minimum wage equates to just over 25K. My wife erns less than that. The care assistants under her also earn less. So I don't expect their employer to increase the care assistants to 25K and then increase the wife's salary pro-rata. 

They are all going to hit the limit and clump around the minimum wage. Under those circumstances, how are employers going to remunerate those that do a higher-spec job than the base workers? 

What would be the point of being low-level management if you're getting paid the same as an ordinary worker?

At the bottom end, the new minimum wage will sweep up a lot of positions where there will be no differentiation wage-wise.

There will be no incentive to progress, no reward for doing a better job, or moving to management. Under those circumstances, how do you motivate the workforce? 

It's no wonder we are becoming so unproductive. You have the option of sitting at home on benefits and getting everything paid for you. As long as you don't have debt and no expensive vices, you can life a comfortable life if you are careful. If you go out to work, you get minimum wage which won't cover rent etc. but if you do somehow manage to get the system to work for you and you somehow can afford to pay rent, you'll then find there's no progression because employer's can't afford to differentiate between operatives and managers with different pay scales.

There's the so-called glass ceiling for women trying to move up in management positions, but this is the working-class brick ceiling. The inability of employers to continue to differentiate lower levels on a pay basis. 

They may have to start introducing increased holiday terms, thereby reducing productivity even more. Although to be fair, maybe managers could be at work less. 

We really are circling the drain when it come to productivity. 

UPDATE: 

It seems that employers that had the inside scoop to the Treasury's plans were ahead of the curve. My son-in-law works for Euro Car Parts. They made all of their branch managers redundant yesterday including him. I assume they've factored that they can spread the salaries of the branch managers across the lower wage tiers to pay for the minimum wage rise. 

Not a painless payrise for some.

I predict this will not be the last instance of this sort of activity. If employers are forced by law to pay ordinary workers what they would normally pay management, why would they employ managers? The managers will go and the ordinary workforce will have to take on those roles to keep up productivity and/or the wages costs the same.