Dr. Tom McDonnell:

-----and certainly that low wages are, in effect, a subsidy to low-paid work, which is bad for productivity and innovation in the long run. The living wage could be an impetus to innovation and productivity gains by businesses that currently do not necessarily have to make the changes at present.

There are also advantages to having high minimum wage rates. For example, there tends to be lower levels of turn for firms. That means there are lower retraining costs, there tends to be better morale and workers tend to be more engaged. It could be of benefit to the economy overall, including those small firms, if there is a happier and more secure workforce. I am pretty sure I missed some of the Deputy's points but, hopefully, that touches upon most of them.