The British Chambers of Commerce (BCC) is urging the Low Pay Commission to recommend maintaining the National Minimum Wage (NMW) at its current level next year and until economic conditions have significantly improved.
The BCC has calculated that another increase in NMW, at the same amount as in 2008, would cost businesses £300 million.
The BCC argues that hard-pressed businesses will be unable to afford a wage increase anywhere near that sum, and as a result, a zero per cent rise in the NMW should be adopted next year.
The business group is stressing that any increase above zero per cent risks adding to unemployment, which the BCC has already forecast to reach 3 million by 2010.
Commenting, Director General of the British Chambers of Commerce, David Frost, said:
"We're not opposed to the minimum wage going up when employment is high and the economy is doing well, but when jobs are being lost daily and a recession is in full swing, it makes no sense to increase the NMW.“Most businesses are prioritising survival at the moment. A rise in minimum wage would not help firms hold onto staff and would simply add to unemployment."