We need the minimum wage for under-21s to be raised


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6:20 pm - May 17th 2012

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contribution by Ian Silvera

A petition has been created to pressure the government to raise the minimum wage for under 21 year olds. The petition follows the Chancellor of the Exchequers’ announcement outlined in the budget in March 2012 that the minimum wage for over 21 (currently at £6.08 per hour) would be raised to £6.19 per hour in October 2012.

Gorge Osborne’s 11p increase will not meet inflation, as recommended by the Low Pay Commission. The minimum wage for under 21 year olds will remain frozen at £4.89 per hour, not meeting inflation.

Author of the petition James Imhoof argues that there is no evidence to support the government’s argument that the minimum wage freeze for under 21 year olds will help people get back into work.

Mr Imhoof said: “This unjust measure will only serve to widen the increasing intergenerational inequality that we are seeing in Britain, and force hundreds of thousands of young people further into poverty.”

He added: “The cost of living continues to rise, and it is only fair that the minimum wage should rise as well.”

The petition asks parliament to discuss an increase in the National Minimum Wage in line with the current rate of inflation for under 21 year olds.

It follows figures released yesterday by the Office of National Statistics (ONS) which show that UK unemployment fell by 45,000 between January and March 2012.

You can sign the petition here: http://epetitions.direct.gov.uk/petitions/33865.

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Reader comments


1. Northern Worker

I started work in 1966 as an engineering apprentice on £4 10s 6d (four pounds ten and sixpence) per week for 44 hours. In today’s money that works out as roughly £2.70 per hour based on income growth. No conclusion, really, just saying.

2. Mr Potarto

“This unjust measure will only serve to widen the increasing intergenerational inequality that we are seeing in Britain”

Isn’t that a good thing? It means that as you get older you get richer. I’d far rather have “increasing intergenerational inequality” than the same wages I had when I was 18.

I love your plan to increase unemployment for the young.

This plan can best be described as barkingly insane, the one group that does appear to be suffering lower than expected employment because of minimum wage legislation and you want to make the problem worse?

#1 Northern Worker:

You make an interesting point. As I understand it, in the middle 1960s time my mother – who had two years of college and nearly ten years of experience as a primary school teacher behind her – was on about £6 a week.

Of course, income growth figures are one way of measuring things, but there are others – the comparative price now and then of a Mars bar (trivial), or of housing (definitely non-trivial) or travel to work (ditto).

@ 1. Northern Worker

“I started work in 1966 as an engineering apprentice on £4 10s 6d (four pounds ten and sixpence) per week for 44 hours. In today’s money that works out as roughly £2.70 per hour based on income growth. No conclusion, really, just saying.”

I know that feeling. I’m an apprentice gas engineer now and I literally make £2.83 an hour. I’m also a northerner, Inverness… Funny old world innit? We probably even work for the same company..

“Author of the petition James Imhoof argues that there is no evidence to support the government’s argument that the minimum wage freeze for under 21 year olds will help people get back into work.”

It’s not the government’s argument you halfwit dimbo.

It’s the Low Pay Commission’s argument. You know, those independent technocrats who are there to take such decisions out of the hands of party politics?

“Gorge Osborne’s 11p increase will not meet inflation, as recommended by the Low Pay Commission. The minimum wage for under 21 year olds will remain frozen at £4.89 per hour, not meeting inflation.”

Quite apart from anything else, have you noticed that wage rises for everyone are currently below inflation?

7. Chaise Guevara

I think we need more details of the argument for freezing the wage. As I see it, the point of allowing employers to pay under-21s less than “adults” is to increase the chances of under-21s finding short-term employment, so they don’t find themselves experienced out of getting a first job, or supporting themselves through uni, or fending for themselves after leaving home.

If the wage split hasn’t acheived that, there’s an argument for increasing the divide (at more than a pound an hour I’d be surprised, but it’s possible). If not, then this is just penny-pinching.

3

The reason that young people suffer from unemployment more than other age groups is, that they can’t apply for tax credits, as they usually do not have children. Those with children, generally are better off working because they get, what amounts to, welfare benefits. This is one reason why our welfare state is expanding and stands at an all time high.

9. Chaise Guevara

@ 8 steveb

That might explain why they suffer more during unemployment, but it doesn’t explain why they’re more likely to be unemployed.

9

I must admit I don’t grasp the point that you are making, even before the recession, young people (16-24 year olds) suffered the highest unemployment levels. Tax credits distort the labour market as they enable people, who would not be able to live on the low wages offered for some unskilled jobs, to receive a top-up. Those who take the jobs are likely to be older.

Tax credits act as a discriminatory force against young, single people who do not have children and/or live within a houshold of other wage earners.

Simply put, they are discouraged from applying for the jobs in the first instance because of the financial consequences.

11. Chaise Guevara

@ 10 steveb

Oh, sorry, I misunderstood you. I didn’t realise you meant that tax credits made it viable for people to take certain jobs.

The real headline: “We need higher youth unemployment”.

Why should someone under 21 be entitled to a lower minimum wage than someone over 21?

Perhaps if the minimum wage was brought in line, the tiny minority of young people who would rather be on benefits would lessen.

14. Chaise Guevara

@ 13 Richard

“Why should someone under 21 be entitled to a lower minimum wage than someone over 21?”

It’s fundamentally unfair. I’m in favour of it anyway. It goes against all my instincts: not only is it prejudice, it’s government-mandated prejudice, and it implies that young people are worth less than their older counterparts, and are not deserving of the same quality of life.

However, I suspect it really helps young people by making it easier for them to get a foot on the jobs ladder. And age-based discrimination always seems a bit more tolerable that race/gender/whatever-based discrimination, because there’s a feeling that it evens out over a lifetime.

@11 It’s more that Tax Credits reduce the labour cost of those able to claim them, thus providing an advantage over young childless single people when applying for low skilled jobs. Tax credits essentially create a downward pressure on wages because claimants don’t need to worry overly much about working for a miserly wage because the government will pick up the tab of their living costs, which employers find very nice indeed.

There are ways for the young to reduce the cost of their labour to compete, it involves copying several of the social factors that allows immigrant labour to be cheap, namely – collective living, shopping and eating. Which isn’t exactly what we drill into the young, we tell them they’re supposed to couple up, settle down and get a house together, not group up 6 in a 1 bedroom flat.

16. Chaise Guevara

@ 15 Cylux

Perhaps the message should be “it’s great if you get a relationship, because then you can share a two-bed flat with another couple for cheap”. Not because that’s ideologicially fantastic, but out of pure pragmatism.

This generation seems to be relatively financially savvy anyway, possibly because people want to avoid their parents’ fuck-ups.

17. Planeshift

“However, I suspect it really helps young people by making it easier for them to get a foot on the jobs ladder. ”

I don’t this is the case really. The problem with having a different min wage for different groups is you simply create an incentive to discriminate. The employer thus fires the worker on his/her 21st birthday and replaces them with a younger model.

Plus I think high levels of youth unemployment have less to do with wages or regulation and are more about the way in which jobs are alloacted now. It is incerasingly the case that employers simply don’t train people up, and instead expect their employees to be job ready. They also place massive value on experience on CVs. Hence young people don’t get their first job through the conventional route of application form/interview – they’d have no chance in the job market today. They instead get it through social networks and contacts, mainly built up through internships, work experience etc. Even some bars now use interns…..

The problem here is that there is essentially a limited role for policy beyond the obvious thing of not making things worse through unbelievably stupid job centre rules and schemes that prohibit work experience or force people into innappropiate ones.

There are obviously trade offs in having a min wage, but if you decide to have one you have to have it set at the same level for everyone if you truly want to get the benefits from having one.

18. Chaise Guevara

@ 17 Planeshift

Fair point r.e. sacking 21 year olds. Is that even legal?

I think you’re right about the trends in the job market overall, but I imagine it’s less true of mimimum wage jobs than other ones. The guy hiring shelf-stackers at his supermarket can’t realistically expect everyone to have experience. Apart from anything else, experience would likely mean that they have a more senior position at their current firm.

19. Planeshift

“sacking 21 year olds. Is that even legal?”

I guess most employers take the chance that 21 year olds have no idea of their employment rights, and in any case I’d suggest most 21 year olds will have at some point done something that could be used against them – turning up hungover, looking untidy etc.

“The guy hiring shelf-stackers at his supermarket can’t realistically expect everyone to have experience”

Equally though at that end of the scale I’d say age discrimination is far more likely to be in favour of the young as the jobs are more physically demanding. I doubt making the min wage the same for everyone would price young people specifically out of those jobs

20. Chaise Guevara

@ 19 Planeshift

Aye, there’s quite a gap between what’s legal and what happens. Another good point regarding young people being well-fitted to these jobs anyway; my mind may be changing on this one.

21. Mr S. Pill

The thing that grates about this ridiculous bit of legalised discrimination is that a 20 year old could’ve joined a company at 16 and worked their way up the ladder, find themselves out of work due to no fault of their own (say – the company goes into administration (Clinton Cards? HMV?) and then be forced (yes, forced – the dole can be withdrawn if you don’t accept work) to work for a pittance – where their older colleagues at least get a semi-normal wage, even if the (proper grown-up) NMW is still crap.
That is quite apart from the inherent discrimination as well. Does a 20 year old not work as hard as a 22 year old? for that matter does an 18 year old not work as hard as a 28 year old? In my office I work with people ranging from 18 to 57 and the workrate is variable whether you are 34, 23, 46 or whatever. Age is not a valid excuse for discrimination (thankfully my company do not discriminate) and it’s disturbing seeing people willingly condone this legalised way of enforcing poverty.
You can get married and have children and pay full tax (etc) at 18 – why can’t you get paid the same as your colleagues?

22. Dissident

@ Mr S Phil

Because employers want to have their cake & eat it, simple as that. Lower wage bills at the bottom means higher wage accumulation at the top – irrespective of real performance. Total wage bill the same, just a glorified, semi-competent box ticker who knows how to speak corpie gets his/her big house, flash car & lots of holidays in the caymans

23. Mr S. Pill

@22

well yeah. what gets me is people at the bottom of the ladder defending legalised discrimination. I expect it from the privilaged & loony like Mr Worstall (who infamously hates the NMW for anyone).

24. Charlieman

@17. Planeshift: “The employer thus fires the worker on his/her 21st birthday and replaces them with a younger model.”

As Chaise suggested, it isn’t as easy as that to fire people. The difference between employing an 18 year old on minimum wage for a year versus a 21 year old is about £2,100 in salary. Let’s call that £3,000 when you add in employer’s NI.

The “saving” of £3,000 has to be offset against the cost of recruitment, training and potentially lower productivity.

25. Charlieman

@21. Mr S. Pill: “That is quite apart from the inherent discrimination as well. Does a 20 year old not work as hard as a 22 year old? for that matter does an 18 year old not work as hard as a 28 year old?”

I think that we need to step back from the logical argument about discrimination and look at precedent. In the 1970s, for example, companies paid 18 year olds less than 21 year olds because the youngsters were assumed to be living at home and that the relative oldsters were saving money to marry or were already married; most of the time the relative oldsters would be experienced workers that justified a higher wage based on productivity; but partially they were paid more because some, not all, had to contribute more to the household budget.

Somehow those precedents have been transferred to our modern world. All the same, I hope that the minimum wage earners dip into their pockets so that mum and dad can keep the house running.

I started work in 1964 at £6 a week as a computer programmer. Yes, that was more than “Northern Worker”, but none of my friends, all of whom were northern workers, took exception.
If we had been worth more than twice as much then different firms would have bid for our services

If you want a market economy, you have to let the market work. If youth unemployment is sky high that’s telling you that youth wages are too high.

So what’s most sensible, lowering the minimum wage, by allowing inflation to take it’s toll, or raising the minimum wage out of some idea about fairness, thereby unfairly, I would say, denying a large proportion of young people the work experience they need to increase the market value of their labor?

If you’re concerned about folks actually starving, contribute to a soup kitchen.


Reactions: Twitter, blogs
  1. leftlinks

    Liberal Conspiracy – We need the minimum wage for under-21s to be raised http://t.co/uBT91VeC

  2. representingthemambo

    Liberal Conspiracy – We need the minimum wage for under-21s to be raised http://t.co/uBT91VeC

  3. Ian Silvera

    New petition for a raise in the min wage for u21s: http://t.co/MgweUupc RT

  4. Ian Silvera

    @JImhoof Got some coverage here: http://t.co/MgweUupc (Few subbing issues, though).

  5. Ian Silvera

    If you're U21, you should sign this: http://t.co/MgweUupc RT

  6. per sunan

    "@leftlinks: Liberal Conspiracy – We need the minimum wage for under-21s to be raised http://t.co/bbk15Xyr" Absolutely, yesterday

  7. BevR

    We need the minimum wage for under-21s to be raised | Liberal Conspiracy http://t.co/iKnP6yNc via @libcon

  8. Mark Smithson

    We need the minimum wage for under-21s to be raised | Liberal Conspiracy http://t.co/iKnP6yNc via @libcon

  9. neil lambert

    We need the minimum wage for under-21s to be raised | Liberal Conspiracy http://t.co/iKnP6yNc via @libcon

  10. Linda Burnip

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  11. BevR

    We need the minimum wage for under-21s to be raised | Liberal Conspiracy http://t.co/iKnP6yNc via @libcon

  12. Shifting Grounds

    'The minimum wage for under 21 year olds is set to remain frozen at £4.89 per hour, not meeting inflation.' http://t.co/kmkbgvRf

  13. Ionic Etudes

    'The minimum wage for under 21 year olds is set to remain frozen at £4.89 per hour, not meeting inflation.' http://t.co/kmkbgvRf

  14. Joseph Healy

    We need the minimum wage for under-21s to be raised http://t.co/kr2c2auL

  15. Caleb John Wooding

    @libcon thanks for http://t.co/9VtRorSv , it made me write http://t.co/ak0h95E1

  16. We need the minimum wage for U21s to be raised « Ian Silvera

    [...] more here.  Share this:FacebookEmailTwitterLike this:LikeBe the first to like this [...]

  17. Liberal Conspiracy

    @libcon thanks for http://t.co/9VtRorSv , it made me write http://t.co/ak0h95E1

  18. BevR

    We need the minimum wage for under-21s to be raised | Liberal Conspiracy http://t.co/iKnP6yNc via @libcon

  19. Billy Donohoe

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  20. Fixing Britain’s Woes 2 « Gnstr's blog

    [...] We need the minimum wage for under-21s to be raised (liberalconspiracy.org) [...]





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