From education to employment

Why You Should Pay at Least the National Minimum Wage for an Apprentice

Alex Glasner

Late last year, the Treasury announced that it will increase the apprentice minimum wage by a whopping 9.7% in April 2023.

However, with the national minimum wage increasing by the same amount, the apprentice minimum wage is still 50% lower, at only £5.28 per hour. For many young people, despite all the long-term career benefits of an apprenticeship, the salary simply doesn’t add up.

I’m committed to ensuring that we encourage all companies we work with to pay a fair wage to apprentices and encourage you to do the same. In fact, in light of the spiralling cost of living, it is not only the right thing to do by the young people you employ, but it makes business sense.

We’ve all felt the impact of the cost of living crisis: double digit inflation, energy bills exceeding £4,000 a year and petrol prices at record highs making commuting a struggle – everyone is impacted, especially the least well paid.

Young apprentices, who earn the lowest wages in the UK, will suffer the harshest impacts of these rising costs.

Many people may expect that young apprentices live at home with parents who can support them. This assumption – which shouldn’t impact pay in any case – is not correct. Many apprentices live alone, or have had to move for work, or come from families that cannot afford to support their children especially in these times.

The effect of all this is increased stress about making ends meet. What is clear is that, in many cases, apprentices are actively seeking or carrying out second jobs to supplement their income or seek higher wages. The impact on their work goes without saying, but the impact on the company will be equally deep as employees have other focuses and the quality of their work declines.

Deloitte estimates that poor mental health, often caused or exacerbated by stress, costs UK employers £42-£45 billion each year, with approximately 60% of these costs arising from decreased productivity and effectiveness. Young people are the most vulnerable to mental ill health in the workplace and financial concerns are a significant contributor to this; two thirds of employees who are struggling financially report at least one sign of poor mental health that could affect their ability to function effectively in the workplace.

If the moral argument doesn’t persuade you, then the business argument should.

There are also endless positive reasons to support apprentices with fairer wages. From attracting the best talent that good wages and great culture promote, to ensuring talent stays longer and feels valued; paying apprentices a fair wage provides businesses with substantial benefits and ultimately, will provide savings in the long term as productivity rises and hiring costs go down.

This new year I ask everyone to make a new pledge: to pay and encourage others to pay their apprentices a fair wage.

By Alex Glasner, Managing Director at Workpays

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