Forget the Apprentice Minimum Wage, it’s an Apprentice Living Wage we need

The national minimum wage for apprentices will rise again in April, from £3.70 to £3.90 per hour, the chancellor announced in October’s budget statement.

The 20p extra is a 5.4% rise and follows last year’s increase from £3.50 – after Philip Hammond accepted recommendations from the independent Low Pay Commission –and the jump is larger by proportion than all other minimum wage groups.

However, it’s still not enough for many people who could otherwise be attracted to apprenticeship programmes. For 18- to 20-year-olds, the increase is from £5.90 per hour to £6.15 – far higher than that of their apprentice peers.

This month, the Green Party’s deputy leader in England and Wales, Amelia Womack, highlighted the issue when she called for a living wage boost for apprentices.

Amelia told the Green Party conference: “If we want to build a working environment that is fair for everyone, we have to make things fair from your very first job onwards.

“A fair workplace has to be fair for apprentices as well. So today we are also pledging our official support for a living wage for apprentices. The current minimum wage for apprentices is £3.70 per hour.

“Three quarters of young people polled this year have said that low pay would put them off taking up an apprenticeship.

“It is no wonder that we have a skills shortage in this country. It is time that the political class woke up to the value of investing in training and apprenticeships, to the hardships facing young people today and to the realities of pay inequality in Britain.”

Catherine McGuinness – Policy Chairman at the City of London Corporation – agreed with Womack, releasing a statement saying: “The government’s aim of addressing skills issues through apprenticeships is welcome. However, the apprenticeship minimum wage £3.50 per hour is simply not sufficient to live.

“Nearly half of apprentices are over 25 and low pay excludes older people with families and young people not living with their parents. And while larger firms often have the capacity to offer quality apprenticeship programmes, smaller firms can lack the resources, knowledge and expertise required.

“Our work with SMEs has revealed a real desire for smaller firms to work together to access training and share knowledge and employ apprentices, but often they cannot secure the training they require. The government should support these employers to collaborate and incentivise bigger firms to open-up their apprenticeship training to smaller firms.”

Responding to an announcement from the Living Wage Foundation, offering recommendations for the Government’s Low Pay Commission to meet their “aspiration to end low pay”, Adam Williamson, Head of Professional Standards, AAT (Association of Accounting Technicians), said:

“Employers, including AAT, who have Living Wage Foundation accreditation are going above and beyond their legal requirements by paying the Living Wage, it sets a strong tone – not only to employees but to customers, suppliers and other stakeholders.

“With a third of AAT’s student population being aged under 25 and with over 10,000 studying apprenticeship schemes, we support the National Union of Student’s description of the apprenticeship wage as “exploitative” and believe they should also receive the standard minimum wage.

“All businesses, large and small, should consider signing up to the Living Wage to help eradicate low pay and act to the benefit of students, apprentices, small business owners, skilled workers and many other employees.”

AllAboutResearch – the research hub now publishing research for AllAboutSchoolLeavers – has found data to support this view – especially in more expensive parts of the country.

Last year, our survey looked at the question of parental support as part of its annual school leaver careers market research. 67% of parents said they would like to support their children moving to another part of the country for work, but that it would depend on the scale of cost.

Over half (54%) of parents who said they wanted to help their children financially, said they would give between £50-£200 per month. The average UK rent at the time was £908 per month (£1,524 in London)*, meaning that for Level 2 and 3 apprentices on an average weekly wage of £261.75**, it was barely manageable to rent outside of London and impossible to rent in London.

For Level 4 and 5 apprentices on an average weekly wage of £405**, renting outside of London was comfortable, but renting in the capital was barely manageable.

This meant that young people whose parents did not live in London – or whose parents could not contribute to living costs – would be excluded from most apprenticeship opportunities in the capital.

This is a concern for young people wanting to make the most of apprenticeships in London, but also for apprentice employers in the capital – they could be missing out on bright school leavers who just happen to live elsewhere.

This year’s research has just been published, providing even more insight into the attitudes and circumstances of real-life young people and their parents: employers should bear these financial realities in mind when setting their apprentice salaries, but the nation could also help address it by considering introducing a living wage for its young trainees.

Emma Finamore, Editor, AllAboutSchoolLeavers.co.uk

* Figures published in HomeLet Rental Index 2017

** Based on an average wage of £6.98 per hour for Level 2 and 3 apprentices and £10.80 for Level 4 and 5 apprentices and a 37.5 hour working week. Average wages were published in the Apprenticeship Pay Survey 2016