Labour pledges minimum wage £10 for under-18s

Labour will extend its plans for a higher £10-an-hour minimum wage to include workers under the age of 18, party leader Jeremy Corbyn has said.
Currently, under-18s are entitled to a minimum wage of £4.35 per hour, compared with £8.21 for over-25s.
But under a Labour government this “youth rate” for the minimum wage would be ended in 2020, Mr Corbyn said.
One business group said there was value in having the minimum wage set by an independent group, as it is now.
Mr Corbyn had already pledged to raise the National Living Wage – a legally binding hourly rate for workers aged 25 and over – to £10 an hour next year, if Labour gained power.
He said Labour’s proposal would see workers aged 16 and 17 paid about £2,500 more a year.
It is not clear how the proposed changes would impact those on apprenticeship schemes.
All UK pupils can leave school at the age of 16.
But in England, under-18s must then stay in full-time education, start an apprenticeship or traineeship or spend 20 hours or more a week working or volunteering, while in part-time education or training.
Speaking at a party gathering in Birmingham last Saturday, Mr Corbyn said: “Equal pay for equal work is hardly a controversial idea, so why are we discriminating against young people?
“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 young, they could be on half the wage of their colleagues.
“It’s time to end this discrimination. Young people’s work should be properly valued, not exploited by employers to cut their wage bill. If they’re doing the job, pay them the wage – the real living wage.”
The rates are reviewed each year by the government which is advised by the independent Low Pay Commission.
The commission, made up of trade unionists, businesspeople and academics, has previously said different minimum wages have been set for different age groups due to “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.”
Paul Johnson, director of the Institute for Fiscal Studies, said the proposals were “dramatic” and that they could risk reducing the number of 16 and 17-year-olds in work.
That age group would not have much experience and were probably not going to be as productive as more experienced workers, he told Radio 4’s Today programme.
He added that a lot would be working part time – at the weekends or in the holidays – and that experience would be valuable to them and could include training.
Labour said it would use fiscal savings from a reduction in the amount that the Treasury pays out in in-work benefits to provide support for small and medium-sized businesses.

Peter Dowd, shadow chief secretary to the Treasury, said the plans aimed to create fairness, claiming that spending on tax credits to top up low wages had “ballooned” from £1bn to £30bn – a sign wages had to rise.
“We’ve got to have a system that reflects the needs of small businesses, but also has to reflect the needs of the people they employ, whether they are 16 or 60,” he said.
Mr Johnson added that any compensation scheme would “need to be very clear, transparent and easy.”
Responding to Labour’s proposals, the Institute of Directors said there was value in having an independent, evidence-based approach from the Low Pay Commission.
“Politicians directly setting rates will always risk not taking full account of the implications for employers and jobs,” the business lobby group said.
Minimum wage rates from April 2019
• 25 and over: £8.21
• 21-24: £7.70
• 18-20: £6.15
• Under-18: £4.35
• Apprentice: £3.90

 

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