The Low Pay Commission (LPC) is an independent body which advises the government on the levels of the National Living Wage (NLW) and the National Minimum Wage (NMW). To help shape the recommendations the LPC invites organisations, charities, businesses and individuals to submit evidence to its consultation. The consultation seeks to get views on the impacts of any proposed increase to either the NLW or NMW, the opportunities that might be created as a result of such changes, the challenges that any proposed changes might create and the fairness of the NLW and NMW rates.
Background
Young people are most likely to be on NMW or NLW and in insecure work, which is particularly concentrated in hospitality work for those aged 18-24. In 2024 the threshold for NLW will be lowered from 23 to 21 making the NMW and NLW increasingly relevant to the age range of the young people we work with at Youth Employment UK.
This consultation regarding the minimum wage is set against the background of the cost of living crisis. Inflation had risen to 9.6% in May 2022 and was a major concern amongst the young people in our network.
The most recent ONS employment figures from June 2022 shows a 0.2% increase in the youth unemployment rate to 10.8%. The number of young people between 16-24 who are economically inactive and NEET is at 457,000, which is up by 25,000 on the last quarter.
There is currently a participation crisis at the same time as record high job vacancies. Job vacancies have hit 1.3 million for the first time ever, meaning there are now fewer job seekers than vacancies. The number of vacancies remains higher than pre-pandemic levels with an increase of 503,900 since January – March 2020.
Youth Employment UK’s Findings
Youth Employment UK sought the views of young people aged 14-24 across the UK to provide a response to this consultation. Through our Youth Voice Census; our national survey, a short, targeted Young People Questionnaire and Youth Ambassador Roundtables discussions we were able to capture the views and experiences of young people who have in general told us that they believe there is an unfairness to the current system and this unfairness is affecting their everyday choices and opportunities.
Across the Youth Voice Census, Youth Ambassador Roundtable and Young People Questionnaire we heard that:
- 58.3% of young people would be less likely to apply for an opportunity if it pays the NLW or NMW.
- 58.3% of respondents “agree” or “strongly agree” with the statement “I can’t afford to work for National Minimum Wage.”
- 75% of respondents to our national survey “agree” or “strongly agree” with the statement “Apprenticeship wage rates are too low.”
- The Youth Voice Census 2021 also found that 24.5% of young people who filled in the census responded with disagree or strongly disagree they are paid fairly.
Set against the backdrop of the cost of living crisis, these findings suggest that young people do not feel the current National Minimum wage is adequate to meet these economic challenges.
Youth Employment UK’s Recommendations
We believe that in order to support economic growth and to encourage young people to participate and stay in work the quality of opportunities must improve. Making sure jobs are fairly paid and providing good working conditions should be a government priority.
As part of our response to the consultation we are provided the Low Pay Commission with the following recommendations:
- Review the target rate against inflation projections to ensure that it will provide a living wage to workers in the UK based on the current market predictions.
- The National Living Wage age threshold should be brought down to 21 by 2023.
- The Low Pay Commission should open a review to explore:
-the gap between the NLW and the under 21 rate, including the apprenticeship rate.
-whether minimum wage rates related to age are the fairest way of setting pay in jobs with low skill demands. - The Low Pay Commission should recommend and encourage employers to commit to good quality work and adhere to the Good Youth Employment Charter.
- The Low Pay Commission to continue to have a dialogue with young people
