Within their Make Work Pay scheme the Labour government have outlined plans to eradicate the age bands which sit within the current National Living Wage scheme , stating that they will ‘ensure every adult worker benefits’.
The national minimum wage and the national living wage frequently stir debate, with differing viewpoints on whether all age groups should have uniform pay rates, or if it’s fair that younger workers are paid a lesser national minimum rate compared to the national living wage that is provided to adults aged 21 and over.
In this blog we take a look at the arguments for and against the current scheme.
Proponents of the lower minimum wage argue that an older worker potentially has more experience than their younger counterparts and are therefore deserving of receiving a higher rate of pay. This has been hotly opposed, with challengers to the scheme airing the view that experienced members of staff should be rewarded by receiving a higher pay rate and not younger workers penalised with a lower rate.
There is a school of thought that the current system as it is could actually lead to penalising both employees.
Prior research has suggested that younger individuals were frequently neglected for employment in favour of older workers when a tiered National Minimum wage framework was absent. This was indicated as a contributing factor to elevated unemployment rates among the younger population. Nonetheless, data indicates that since 1992, the unemployment rates for those aged 16 to 24 have consistently been substantially greater compared to other age groups. Unemployment rate in the UK by age
https://www.statista.com/statistics/974421/unemployment-rate-uk-by-age/
This raises the question as to the success of the system over the last 30 years.
The rationale for lower pay is to motivate youth to remain in education, with the perspective that improved educational outcomes will result in a more proficient UK workforce and generally higher wages across the board.
Advocates of the system also point out the beneficial effects on businesses and the economy, emphasising that the reduced pay arrangement provides employers with a more affordable workforce, aiding in maintaining business operations, and ultimately leading to increased employment opportunities, which is advantageous as unemployment rates begin to climb once more.
In their latest newsletter, the Federation of Small Businesses stated that during a recent survey, 90% of small businesses aired concerns that the new Government Make Work Pay initiative would “increase the costs and the risks associated with employing people”.
The Same Job/Same Pay phrase is a recurring echo amongst opponents of the scheme, with much agreement that a wage should reflect the job itself and not be based on the worker’s age.
Consider a situation where two people, one aged 20 and the other 21, are employed simultaneously for identical roles with equal experience. Due to their age difference, the 21-year-old earns £2.84 more per hour. This results in an additional £22.72 for an 8-hour day, £113.60 weekly, and an annual difference of £5,907.50!
Does the younger age justify a pay gap of nearly £6000 per year?
Many also believe that in today’s modern world many under 21s often have the same living costs as their older counterparts. Consequently, paying them lower wages hinders their ability to sustain themselves independently.
Maybe unsurprisingly many deem the system as discriminatory, considering the scheme to be nothing more than a form of legal age discrimination, this is certainly the view of the new Labour government.
Concerns are also voiced around the opportunity for exploitation; however, there is a counterargument that having a lower minimum wage curbs such exploitation. The theory given that employers could save on labour costs through the reduced wages applicable to younger staff, which should deter more scrupulous employers from paying lower wages to all staff.
Whilst there is validity to arguments on both sides of the debate, QS Recruitment firmly believes in equality as a priority. We understand that our workers are subject to the same living costs irrespective of their age and as such we approach each pay rate as a reflection of the individual skills and expertise required to fulfil that role and not with an age bias.
We want to take this opportunity to thank all our clients for supporting us on this stance and understanding that taking this approach allows us to provide the most suitable staff without discrimination.
If you would like to contact us about any of the services we provide, you can find all our details here.
