(Photo credit: StockSnap/Pixabay)
Almost one million workers aged under 21 in the UK face £2.5 billion in lost earnings this year due to the lower rate of minimum wage, estimated the Trades Union Congress (TUC).
The union body said paying a lower rate to young adults is “unfair” and the tiered-rate system must be “overhauled” in their report released last week.
The current minimum wage stands at £9.50 an hour. However, it is £9.18 for 21 to 22-year-olds, falling to £6.83 for 18 to 20-year-olds and £4.81 for under-18s.
That works out to an average of £2,800 in lost wages for every worker under 21 who gets paid less than the full minimum wage.
This rate for people aged 23 and over will increase by 9.7 per cent to £10.42 an hour in April, following recommendations to the UK government from the Low Pay Commission.
The amounts for those aged 21 to 22, 18 to 20, and under-18s will go up to £10.18, £7.49 and £5.28, respectively.
Director of the Living Wage Foundation, Katherine Chapman, said: “The rates remain lower than the real living wage-currently £10.90 in the UK and £11.95 in London-which is based on what it actually costs to live.”
The TUC has called for all workers, regardless of age, to be eligible for the same minimum wage, removing the current lower rates for young workers.
The union body said this should be done alongside progress toward a £15 minimum wage.
The TUC further added the pay increase would lift huge numbers of working people out of poverty, remove the burden of welfare from the taxpayers and allow cut taxes on small businesses.
Another campaign launched this month by the Union of Shop, Distributive and Allied Workers (Usdaw), with around 360,000 members in the UK, also asked for “an end to rip-off youth minimum wage rates.”
The Usdaw’s general secretary, Paddy Lillis, said: “There is no justification for two people doing the same job to be paid differently just because of their age,” adding “it has always been wrong that the law allows pay discrimination by age.”
Furthermore, despite a 5.7 per cent increase in regular pay in the fiscal year ending in September 2022, the fastest growth since 2000, wages in real terms fell by 2.7 per cent when adjusted for inflation.
Regular pay rise versus inflation rate from September 2021 to September 2022/Chart credit: Duong Bui with data from the Office for National Statistics.
A student from King’s College London, Alex Bayley, said the minimum pay rate is currently too low for young adults unless for those who have subsidised living expenses, such as benefits, student loans or support from their parents.
Meanwhile, a young worker from the Wetherspoon pub, who wanted to remain anonymous, revealed she is struggling with the rise of living costs in London due to the low pay rate.
She said: “The prices of food and house rent have rocketed in the last few months, but the wage increased very slightly. I wish there would be more schemes to support young workers like us.”
Various unions in the UK, including TUC and Usdaw, celebrated Young Workers’ Month in November to support this group and campaign on issues affecting young members, like poor working conditions, lack of training and low wages.