UK government divided over minimum wage increase in face of youth jobs crisis
Summary
The UK government is divided about how quickly to raise the minimum wage for 18- to 20-year-olds amid high youth unemployment. Some officials want to slow the wage increases, while others say there is no solid proof that higher youth wages cause job losses.Key Facts
- Youth unemployment in the UK has risen sharply, with over a million young people neither working nor studying.
- The government promised to equalize the minimum wage for 18- to 20-year-olds with that of older workers but did not specify a timeline.
- Business Secretary Peter Kyle thinks now is not the right time to raise youth minimum wage to the full adult rate.
- Treasury Minister Torsten Bell says there is no clear evidence that past youth wage increases hurt employment.
- Former Labour minister Alan Milburn’s report found youth unemployment costs the UK more than £125 billion yearly.
- The Low Pay Commission raised the main minimum wage by 4.1%, and the youth rate by 8.5%; current rates are £12.71 and £10.85 per hour.
- The Commission will recommend minimum wage rates for April 2027 in October, and some in government hope for smaller increases.
- Ministers recently changed their guidance to focus on improving youth employment rates rather than just unemployment numbers.
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