The boss of one of Britain's biggest pub chains was right - the Living Wage will really hurt company profits
The company released a trading statement on Wednesday, and margins are already on the way down, allen from 7.7% in the same period last year, to 6.2% this year.
Margins were driven down by a 13% increase in starting wages for staff paid hourly between October last year and August. The increase has been put in place to start to bring Wetherspoon's pay rates in line with the new wage rules.
Under new laws, the current £6.50 ($10) per hour National Minimum Wage will be abolished in favour of a £7.2o ($11.10) National Living Wage, proposed by the government to ensure that all full-time workers earn enough to pay for basic necessities like rent, bills, transport and food, without the need to take a second job.
In a statement, Wetherspoon's founder and chairman Tim Martin took a thinly veiled dig at Osborne's new Living Wage, saying (emphasis ours):
Martin - who named the chain after a teacher who told him he would amount to nothing - has been highly critical of the government in the past few months, both for the National Living Wage, and for what he perceives as an unfair system of taxing for pubs.