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Young workers missing out on £200 million in minimum wage pay, TUC research shows
The National Minimum Wage came into effect 20 years ago today
Young workers are missing out on £200 million a year in minimum wage pay, according to new TUC analysis published today.
The analysis – published on the 20th anniversary of the National Minimum Wage (NMW) – shows that the average 21-24 year-old minimum wage worker is earning £800 a year less than over 25s.
The TUC is calling for the anniversary to be marked by bringing all over 21s onto the full minimum wage rate and for the minimum wage to be raised to £10 an hour as soon as possible.
The TUC first called for the minimum wage to be introduced in 1986.
TUC General Secretary Frances O'Grady said:
"Unions played a key role in winning the minimum wage at a time when many were warning that it would bankrupt the country.
"But as we mark its 20th anniversary today, we can see there's still more to be done.
"Young workers are still getting a raw deal on pay. Their bills aren't any cheaper, but they have to make ends meet with less. That's just not fair.
"And with in-work poverty rising, we need to make the minimum wage fit for the future by raising it to £10 as soon as possible."
- Impact of including 21-25 year old workers in the higher minimum wage rate calculated using the Low Pay Commission's estimate that 15% in this age group are paid less than the national living wage that is applicable to older workers (LPC report 2018, fig. 3.23, p125).
With the high proportion of part-time workers earning the minimum wage, the LPC estimates average 30 hours per week worked. An estimated 337,000 21-24s would get a pay rise (both those currently on the minimum rate and those on slightly more than 21-24 minimum but below the 25+ minimum).
- The new NMW rates that apply from today:
Age 25 and above
16*-17
Apprentices**
*16 year olds above school leaving age
**Apprentices below age 18 and older apprentices in first year of training. Other apprentices are entitled to the relevant age-based minimum wage rate.
- Timeline of the minimum wage:
TUC begins two year inquiry into low pay
TUC congress votes to support creation of a national minimum wage, with the motion moved by Rodney Bickerstaffe, General Secretary of the National Union of Public Employees (now UNISON).
First manifesto commitment from Labour for a minimum wage
Labour government elected, with a commitment to introduce minimum wage
Low Pay Commission established to advise government (includes three trade unionists, three representatives from business and two academics)
Low Pay Commission published first report recommending initial rate of £3.60 per hour for age 22 and above
National Minimum Wage act passed
National Minimum Wage Regulations passed
National Minimum Wage legislation came into force, ensuring that all workers aged 22 and over were paid £3.60 per hour.
- Achievements of the National Minimum Wage
In the two decades it has been in place, ultra-low exploitative pay has been outlawed. Its rise today will directly benefit 2.8 million workers, including 225,000 under 25s.
Enforcement is getting better – with bad bosses forced to return £15.6 million to workers and cough up £14 million in fines last year.
- The Trades Union Congress (TUC) exists to make the working world a better place for everyone. We bring together more than 5.5 million working people who make up our 49 member unions. We support unions to grow and thrive, and we stand up for everyone who works for a living.
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