From education to employment

Under 21s face £2.5 billion minimum wage “pay penalty” for being young workers

  • NEW ANALYSIS: Almost one million under-21s “left hugely out of pocket” due to “unfair” minimum wage rates
  • It’s time for an “overhaul” of the minimum wage rates and a £15 minimum wage as soon as possible, says TUC

The TUC has today (Friday) published new analysis which reveals 900,000 under-21s across the UK are currently being left “massively out of pocket” due to being paid a lower rate of the minimum wage.

The minimum wage pay penalty facing under-21s this year has been an estimated £2.5 billion.

That works out at an average of £2,800 in lost in wages for every worker under-21 paid less than the full minimum wage.

The main minimum wage is currently £9.50. However, it is £9.18 for 21-22 year olds, £6.83 for 18-20 year olds and £4.81 for under 18s. These rates are going up in April to £10.42, £10.18, £7.49 and £5.28 respectively following recommendations to government from the Low Pay Commission. 

The TUC says that paying a lower rate to young adults is “unfair” and that the tiered-rates system must be “overhauled”.

The government is taking steps to bring 21 and 22 year olds into the main minimum wage rate by 2024. But the TUC says this does not go far enough and the full minimum wage should extend to all young workers.

Those aged 18-20 continue to be paid 28 per cent less than the minimum wage. And for those aged under 18, the minimum wage is a massive 49 per cent below the main rate.

An overwhelming majority of workers aged under 21 (70%), which is the cut off for youth rates, receive less than the full minimum wage. 

As well as demanding all workers be eligible for the same minimum wage, the union body is calling for a £15 minimum wage as soon as possible to put an “end to low-pay Britain”.

The UK is experiencing the longest and harshest wage squeeze in 200 years – and it is on course to face two lost decades of living standards.

The research comes at the end of the TUC’s young workers’ month, which is aimed at promoting trade unions to young workers.

TUC General Secretary Frances O’Grady said:

“A fair day’s work deserves a fair day’s pay.

“But too many young workers are being left hugely out of pocket because of outdated youth rates of the national minimum wage.

“Almost a million workers under 21 face this pay penalty – 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 end this glaring injustice so that all workers are entitled to the same minimum wage.

“And it’s time for ministers to deliver a plan for a £15 minimum wage so that we can put an end to low-pay Britain for good.”

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