New analysis from the Trades Union Congress (TUC) shows that 18-20 year olds risk being “left hugely out of pocket” due to “unfair” minimum wage rates that penalise young people. They could lose out on more than £2,400 a year when minimum wage rises to £11.44 this April.
Young people minimum wage: losing £2,400 a year
The TUC has published new analysis which reveals more than 700,000 workers aged 18-20 across the UK risk being left “hugely out of pocket” due to being paid a lower rate of the minimum wage. This means that as many as seven in ten workers aged 18-20 could lose out.
The minimum wage pay penalty facing workers aged 18-20 this coming year is an estimated £2,438 a year (for those who work 52 weeks a year), or £47 a week.
The analysis comes ahead of the TUC’s Young Workers Conference this weekend, which focuses on issues facing young workers.
Tiered rates must be “overhauled”
The TUC says that paying a lower rate to young people is “unfair” and that the tiered rates system must be “overhauled”.
Young people are paid a lower minimum wage. The main minimum wage rate is currently £10.42 per hour for those 23 and over. However, it is £10.18 for 21-22 year olds, £7.49 for 18-20 year olds and £5.28 for under 18s.
From April, the minimum wage rises to £11.44 and will be extended to those aged 21 and 22 after the government accepted recommendations from the Low Pay Commission.
However, minimum wage young people aged 18-20 could be paid almost £3 less an hour than those aged 21 and over, with the minimum wage for workers in that age bracket rising to just £8.60.
The Low Pay Commission has also previously stated that the gap between youth rates and adult rates has widened and has said that there is a consensus on the commission that this should be addressed.
Put an end to low pay Britain
TUC general secretary Paul Nowak said:
Everyone should be paid fairly for the job they do.
But too many young workers are still being left hugely out of pocket because of outdated youth rates of the national minimum wage.
More than 700,000 workers aged 18-20 face this pay penalty – they are getting less than older workers for doing the same job.
Young people up and down the country are being hammered by the cost-of-living crisis – like everyone else, they need more money in their pockets now.
It’s time to put an end to low pay Britain.
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