HR · 11 October 2017

Pressure grows to extend National Living Wage to under-25s

Pay slip close up macro shot
The National Living Wage is expected to reach £9 per hour by 2020

Young people under 25 years old who do not qualify for the National Living Wage are losing out on between £820 and £6,000 a year, according to a new report, despite a majority of employers believing pay should be equalised for staff performing the same role.

The “Paid Less, Worth Less?” study, from the Young Women’s Trust charity, found that over 1m young people earn as much as £3.45 less every hour than workers qualifying for the National Living Wage in the same role.

Currently, the National Living Wage sits at £7.50 per hour for workers above 25 years old, incrementally increasing since first introduced by former chancellor George Osborne in April 2016. It is predicted to reach £9 per hour by April 2020. The only exception is if the employee is an apprentice, when a different structure is used.

However, a YouGov poll undertaken to support the latest study found that as many as 79 per cent of employers agreed that young workers should receive the same pay as colleagues performing the same job. Some four in five even believed that their youngest employees contributed as much if not more than older staff members in their workplace.

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With the legal apprentice minimum wage at £3.50 an hour, apprentices were discovered to be most likely to see wage disparity in the workplace. Overall, they were left £7,280 worse off every year, and in some cases had been given the same work and responsibilities as non-trainee workers.

After surveying over 4,000 young people, the charity found that 83 per cent favoured raising the apprentice minimum wage, and 79 per cent wanted to see equal pay for equal work by extending the National Living Wage to under-25s. Both policies were more popular than the abolition of university tuition fees.

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Commenting on the launch of the campaign, Carole Easton, chief executive of Young Women’s Trust, said the economic reality faced by many young people in Britain had begun to harm self-confidence, and extending the National Living Wage would bring benefits to businesses and the economy.

“Much more needs to be done to improve young people’s prospects and give them hope for the future,” she said.

“This means giving them the right skills and support to find jobs, ensuring decent and flexible jobs are available, significantly increasing the apprentice minimum wage and changing the law to ensure under-25s are entitled to the same National Living Wage as everyone else. This would benefit businesses and the economy too.”

One advisory panel member from the charity (Nia, 26, from Cardiff) highlighted the fact that living costs and outgoings remained the same for workers above and beneath the threshold.

“When I started work, I was working in a café and because I was under 25 I was paid a lower minimum wage. It was exactly the same job and exactly the same number of hours as the older people I worked with, but at the end of the day I was taking home less money.

“People under the age of 25 have to buy food, travel to work and pay bills like everyone else.  We are working hard like everyone else. And I didn’t suddenly gain a lot more experience on my 25th birthday.”

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Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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