UK Government Delays Timeline to Equalize Minimum Wage for 18-20 Year-Olds
Government Position and Reactions to Minimum Wage Equalization
Current Government Stance on Minimum Wage for Young Workers
LONDON, May 29 (Reuters) - Britain's government is not committed to ending a lower minimum wage for workers aged 18-20 before the next national election due by 2029, a government minister said on Friday after a report warned of a 'lost generation' and rising youth joblessness.
Labour's Election Promise
Labour promised before winning a large election victory in July 2024 "to remove the discriminatory age bands, so all adults are entitled to the same minimum wage".
Clarification from Government Ministers
Asked if that meant doing so by the end of the current parliamentary term, junior minister for pensions Torsten Bell said the pledge was not a commitment to do that.
"We're committed to our manifesto... but that manifesto did not set out the timeline," he said in a BBC radio interview on Friday.
Voters who thought the manifesto commitment was a promise to be delivered during the government's initial term in office were making "an understandable mistake", he added.
Impact of Minimum Wage Changes on Young Workers and Businesses
Recent Wage Increases
Since the election, the minimum wage for younger workers has risen 26% to £10.85 ($14.55) an hour, while that for workers aged 21 and over increased 11% to £12.71.
Business Concerns
Many businesses blame the minimum wage increases for reducing the number of younger workers they hire, especially in sectors such as retail and hospitality.
Reports and Policy Recommendations
Analysis by Former Government Minister
In a report on Thursday, former government minister Alan Milburn said the higher minimum wage was not clearly to blame for the increased number of young people not in employment, education or training (NEET), which now exceeds 1 million.
But he urged policymakers to take recent trends into account and not do things that might make things worse.
Role of the Low Pay Commission
Commission's Mandate and Recent Changes
Britain's minimum wage rates are set by a government-appointed body, the Low Pay Commission, which receives an annual remit on how to approach the task and takes labour market conditions, inflation and other factors into account.
In March, the government changed the remit around the youth minimum wage rate to allow the Low Pay Commission "full flexibility to determine the pace and ultimate timing" of the promised alignment with the adult rate.
Additional Information
Exchange Rate
($1 = 0.7457 pounds)
(Reporting by David Milliken; Editing by Alistair Smout)
