Llanelli MP Nia Griffith has told the Government that the so-called “Living Wage” of £7.20 an hour, introduced by former Chancellor George Osborne earlier this year, should apply to younger workers and not just to those over 25.
Speaking up in Parliament on the annual uprating of the National Minimum Wage, Nia Griffith MP explained
“This year’s rise in National Minimum Wage rates is a real kick in the teeth for younger workers, widening the gap with older workers. When Labour introduced the National Minimum Wage in 1999, in the face of fierce opposition from the Conservatives, we had to proceed cautiously. The hope was that once introduced, rates could be gradually improved and I have consistently argued for closing the gap between the 18 – 20 year olds and older workers and improving relative pay rates for 16 – 18 year olds, with higher annual percentage increases for these groups. Now, with the so-called “Living Wage” of £7.20 an hour, which I would simply call another tier of the Minimum Wage, applying only to the over 25s, the gap is bigger than ever.
By the time young people are 21, they may have finished a higher education course or they may already have been in work for a couple of years. They may have children, and they should be receiving the same as those who are 25 and over.
Moreover there is the argument that raising the minimum wage saves the taxpayer from having to top up low wages so much with tax credits, effectively subsidising multinational companies, and this argument applies equally to those under 25.
Some argue that the higher unemployment rate amongst the under 25s justifies depressing their wages in relation to the over 25s, as this will make employers more likely to employ them. But this is pure exploitation, and very unfair, both because it discriminates against younger adults because they are getting a lower rate of pay, and because it can prejudice the chances of over 25s getting work as they are seen as more expensive
We should instead be looking at the underlying reasons why it is more difficult for this group to get work. We know that there have been far fewer openings in recent years, with confidence still low in the private sector, and recovery only very patchy across the country, and swingeing cuts in the public sector. This means that often retiring workers are not replaced at all, or only by casual workers, on zero-hours contracts or other such arrangements.
When the new over 25s rate was set at £7.20, it was an increase on the existing NMW of some 7.5%, whereas the proposed new rate for the 21 – 24 year olds to £6.95 is only an increase of 3.7%. If the Government is not minded to give the full £7.20 to this age group, they could at least raise last year’s £6.70 rate by more than 3.7% to try and close the gap. Likewise when we look at the proposed 4.7% increase for the 18 -20 year olds – from £5.30 to £5.55 and the 3.4% increase for 16 – 17 year olds from £3.87 to £4, the gap is now widening, not narrowing between these 3 groups of younger workers and the over25s.
There should be a concerted effort to increase the 18 -20 year old rate by a greater percentage to reduce the differential and bring it up to the rate for 21 – 24 year olds and then to the same rate as the over 25s. We should also have a lesser differential for 16 – 17 year olds.