Under the current minimum wage system, which the Labour Government intends to change, 16-17 year olds have a minimum wage of £6.40, 18-20 year olds receive £8.60, and those over 21 earn £11.44. This represents a 44.06% difference between the wages of 16-17 year olds and those over 21. While this disparity may appear as age discrimination within our national minimum wage system, it is designed to protect employment opportunities for younger workers. The existing age structure of the minimum wage reflects evidence that younger workers are more at risk of being priced out of jobs than older workers, with worse consequences if they end up unemployed.
Currently, the unemployment rate for 16-24 year olds stands at 14.5%, compared to 4.4% for all working-age adults. Employers often exhibit reluctance to hire inexperienced youths, a situation that could be exacerbated by the Labour Party's manifesto pledge to increase the minimum wage for young people by 78.75%. This substantial increase may lead employers to favor hiring more experienced, older individuals at the same wage cost, potentially resulting in higher youth unemployment. Research indicates that minimum wages can create youth unemployment by increasing the number of job seekers while reducing the number of available jobs.
In conclusion, aligning the minimum wage of young workers with that of those over 21 may inadvertently harm young people's employment prospects. Employers might prioritize cost considerations, leading to fewer job opportunities for younger, less experienced workers. Therefore, while the intention behind wage increases is to improve earnings for young workers, it is crucial to consider the potential adverse effects on youth employment rates.
Daniel Inglis is a current Law Student and a Policy Researcher for the ONPG