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Labour unveils plan to axe lower minimum wage for under-18s


Labour has announced plans to introduce a £10-an-hour minimum wage that would include workers aged under 18.

Jeremy Corbyn pledged at a party meeting in Birmingham on Saturday to “end this discrimination” against young workers by abolishing the minimum wage youth rate.

Under Labour, the hourly pay of workers aged 16 and 17 would more than double from 2020, Corbyn said.

At present, workers under the age of 18 are entitled to a minimum wage of £4.35 an hour, compared to £8.21 for those over 25.

“Equal pay for equal work is hardly a controversial idea, so why are we discriminating against young people?” Corbyn said. “You don’t get a discount at the shops for being under 18. But if the person serving you on the other side of the counter is also young, they could be on half the wage of their colleagues. Frankly, its time to end this discrimination.

“So today, I’m announcing that when Labour gets into office, we will extend the £10 living wage to under-18s. We will abolish the youth rate of the minimum wage. Workers should be rewarded for their work, not their age.”

Labour said the average 16- to 17-year-old in employment would be more than £2,500 better off under its plan.

Paul Johnson, director of the Institute for Fiscal Studies, raised concerns about the potential impact of the “really dramatic” plan. “Clearly the risk, given the choice between doubling the wages you’re currently paying 16- and 17-year-olds or not employing them at all … is you will have fewer 16- and 17-year-olds in work,” he told the BBC Radio 4 Today programme.

Matthew Percival, the head of employment at the Confederation of British Industry, said youth rates should be retained as they helped reduce youth unemployment.

“The minimum wage is an important part of the UK labour market and must not be used as a political football,” he said. “It owes its success to the Low Pay Commission [LPC], which is an expert, independent body that brings together business and trade unions to guide the national minimum wage.”

The LPC advises against providing the same minimum wage for under-18s and older workers, saying younger workers are more at risk of being priced out of jobs, with worse consequences if they end up unemployed. Analysis by the LPC shows that unemployment for 16- and 17-year-olds fell after increases in the youth rate of the minimum wage in October 2016 and April 2017, and is at a historic low.

Prof Len Shackleton, from the Institute of Economic Affairs, thinktank said the plans could have “grim” consequences for young workers.

Shackleton said Labour’s announcement made clear it was in “a bidding war” with the Tories and had closed the door on experts on the LPC.

Accusing politicians of preferring to “pluck pay increases out of the air”, Shackleton said: “Such a rate hike could raise youth unemployment to levels comparable with those in continental Europe.

“The possible dangers of a political bidding war over minimum wages have been highlighted time and time again. Now it looks like we have it and the consequences for employment are likely to be grim.”

Peter Dowd, the shadow chief secretary to the Treasury, defended the plans and told BBC Breakfast it was “a question of equality and equity, quite simple really. At the end of the day, young people are entitled to be paid reasonable wages.”

Labour said it would use fiscal savings arising from a reduction of in-work benefits to provide targeted support for smaller businesses to enable them to pay the real living wage to all staff, guided by the living wage review body.

Chris Philp, the Conservative vice-chair for policy, criticised the proposal. He said: “The last Labour government saw the number of young people without a job rise to almost 1 million and Jeremy Corbyn’s reckless approach to the economy would see the next generation saddled with higher levels of debt and higher taxes.

“Under the Conservatives, we have seen youth unemployment fall by half, the biggest increase in the minimum wage for under-25s in a decade and the economy continue to grow, giving young people the security of a better future.”



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