We need to reform the minimum wage and make it work for young people

By Callum Sloper: @VagaCallum

When the minimum wage first came into effect in April 1999 there were just 2 different rates set at £3 an hour for 18 to 21 year olds and £3.60 for anyone 22 or over. While this has evolved every single year by 10p to 30p extra, it’s also changed significantly in regards to who is entitled to the minimum wage. In October 2003 the Labour Party decided to extend the minimum wage to 16 & 17 year olds who would now be entitled to £3 an hour while 18 to 21 year olds were now getting at least £3.80 and everyone 22 and up were now receiving a minimum of £4.50.

From Age 22+ Age 18-21 Age 16-17
October 2003 £4.50 £3.80 £3.00
April 1999 £3.60 £3.00 N/A

No more major changes were made to the way in which the minimum wage worked for different age groups besides from gradual increases for people already entitled to a minimum wage. However, just a few months after the Conservatives were back in power in 2010 they decided to drop the age you would receive the upper rate from 22 years of age to 21 years of age and also extend the minimum wage to include apprentices (who would receive a very generous £2.50 an hour). They carried on as Labour had, increasing the minimum wage all round on a yearly basis up until April 2016 when they added a new upper rate that would affect people 25 years and older. They called this the ‘National Living Wage’, which was set at £7.20 an hour and hasn’t changed with the latest October 2016 rate rises.

After successive governments fiddling with it and raising it, the minimum wage now looks like this:

From Age 25+ Age 21-24 Age 18-20 Age 16 – 17 Apprentices
October 2016 £7.20 £6.95 £5.55 £4.00 £3.40

While increasing the minimum wage is hailed as a good thing by some, giving workers a better rate of pay, but frowned upon by others who claim that it pushes prices up elsewhere, the argument shouldn’t just be centred on the figure the minimum rate of pay is set at but also on who is entitled to receive a minimum wage. Advances have obviously been made to try and make the minimum wage work well for young people but with the recent ‘National Living Wage’ being given to 25 year olds rather than implemented for people 21 years and older, it’s hard to tell if the government is actually paying attention to younger workers.

To encourage more young people to take up part time work and to do more to help young people who rely on a full time job then the way the minimum wage works needs to be reformed significantly. If the government truly believes that 21 year olds are worth £0.25 an hour less than 25 year olds then it’s no surprise that young people feel like politicians aren’t listening to them. The argument for having a minimum wage where young people fall into different brackets with 2 or 3 other ages is based on the idea that a lower wage will get younger and more unskilled workers into a job in the first place. This is true and it should work like that, but not in the current broken up and bracketed way it does now.

A more workable approach to ensure that young people get a fairer minimum wage would be a smoother ‘progressive’ system, where the minimum rate of pay you’re entitled to changes year by year instead of every 2 or 3 years as the current system works. Someone who is 19 should be entitled to a higher minimum rate of pay than their 18 year old counterpart, instead of potentially having to wait till 21 for a pay rise. Considering we find it acceptable to discriminate against 17 year olds who are entitled to a lower minimum wage than the 18 year old, no one should find this idea shocking, radical or discriminatory.

If we were to base it off the current rates of minimum pay for the different age groups then it would look something like this:

From Age 21+ Age 20 Age 19 Age 18 Age 17 Age 16 Under 16’s
Estimates £7.20 £6.65 £6.12 £5.59 £5.06 £4.53 £4.00

Although a progressive system would only ensure young people an extra £0.64 an hour for every year they get older, it would still level the playing field in a fairer and more sensible way, making sure that young people do feel they’re getting real support from the government in regards to work and pay. Having the current system where the government has raised the bar for being entitled to the highest minimum rate of pay to 25 years old and where you potentially won’t see a pay rise for 2 or 3 years is unnecessary and counterproductive as it doesn’t act as a good motive to carry on working the same job, which many young people will do instead of switching while they’re in education.

This is only one solution to the issue and there’s bound to be plenty of other alternatives to make the minimum wage work better for young people; raising the minimum wage isn’t enough to fix the problem, the government also needs to focus on who receives what level. Particularly as young people are the ones who most often are paid the minimum and fall into the lowest skilled work.