New minimum wage for young workers

Patricia Hewitt, the trade and industry secretary, made the decision based on advice from the Low Pay Commission, which said there was “continued evidence” that young employees were receiving little or no training and “exploitative” rates of pay.

The introduction of the minimum wage for 16 and 17-year-olds will coincide with rises in the basic rate of pay across all age groups, with over 21s getting £4.85 an hour and 18 to 21-year-olds receiving £4.10.

Currently, workers aged over 21 must be paid £4.50 an hour, while the 18 to 21-year-old age group must receive £3.80.

The move will impact on many small firms who use young workers on a casual basis, a practice which trade unions claim has led to many 16 and 17-year-olds suffering from “poverty pay.”

However, the implementation of the new minimum wage, coupled with the increases in basic pay for other age groups, will be a financial blow to many small businesses that operate on tight margins.

Adair Turner, chairman of the Low Pay Commission, said that he wanted to give businesses enough notice as possible to prepare them for the changes.

“We have concluded that a minimum wage for 16 and 17-year-olds will tackle the worst cases of jobs which pay very low wages and provide minimal training, without encouraging young people out of education and training or pricing them out of the jobs market.

“While the increases will be a challenge for many businesses, we believe they are affordable, and can be achieved without damaging people’s economic prospects or the wider economy,” he said.

Brendan Barber, general secretary of the Trades Union Congress (TUC), welcomed the announcement, saying that the minimum wage had defied the “doom-mongers” who said it would cost millions of jobs.

“Unions will be pleased that their campaign for a minimum hourly rate for young people is going to pay off for 50,000 low paid teenagers.

“This will cut out the worst examples of wage exploitation, and the £3 introductory rate should mean that more significant increases can take place in future years,” he said.

However, the Transport and General Workers’ Union (TGWU) warned that the measure is unlikely to prevent younger workers’ pay falling well behind adult staff, citing the example of McDonalds, which pays employees under 20 far less than those over the age threshold.

The T&G said that all workers, regardless of their age, should be paid the same minimum wage, to prevent employers exploiting younger employees.

Tony Woodley, general secretary of the T&G, said that McDonalds is just one example in a long line of companies who have a place in the low pay Hall of Shame.

“But it is the government that is letting them get away with it. We won’t let anyone treat workers badly, the government should take note – we won’t let this inequality continue,” he said.