Daventry District Council is unlikely to become a ‘living wage’ employer following a vote by the strategy group.
Councillors said increasing the pay to 19 of its workers, a cost of some £8,000 a year, would disrupt the payscale, leading to potentially an increase in the wage bill of more than £500,000.
The Labour group on the council raised the issue in November and officers were asked to examine the implications of introducing the living wage.
Cllr Chris Lee told the committee: “We must be pioneering and challenge conventions, and join the nine other East Midlands councils that have already undertaken this policy.
“I fail to see how increasing 19 employees to the living wage will ‘destroy the integrity of the job evaluation system and pay scales’. If increasing 19 employees’ wages by less than £45 a month destroys the job evaluation system, then I would be seriously concerned as to the state of the system.”
Cllr Millar said: “We would all like to support our lower paid staff and we’d all like to give them more money.
“The question is where would this money come from without leading to job losses?”
The committee voted to recommend not introducing the living wage. The recommendation will now go before full council.
The living wage for the East Midlands currently stands at £7.45 an hour, compared to £6.19 for the national minimum wage.
The living wage is calculated according to the basic cost of living in the UK and varies depending on location.
Employers choose to pay the living wage on a voluntary basis; the minimum wage is statutory.
The idea is to help lift people out of working poverty and reduce the need for them to claim benefits such as council tax and housing support.
The living wage proposals enjoy cross party support, with backing from David Cameron and David Milliband.