New minimum wage for young workers

Mar 15 2004 by Brian Amble Print This Article

The UK government has announced plans to introduce a £3 per hour minimum wage for 16 and 17-year-olds from October 2004, while other minimum rates will also be raised.

The minimum wage for over-21s will rise from £4.50 to £4.85 an hour and for 18 to 21-year-olds it will go up from £3.80 to £4.10

Trade and Industry Secretary Patricia Hewitt said that she made the announcement after the Low Pay Commission found "continued evidence" that young workers were receiving little or no training and "exploitative" rates of pay.

Apprentices will be exempt from the legislation, however. Currently those over 18 are only entitled to receive the minimum wage if they have completed the first year of their apprenticeship and have reached the age of 19.

Hewitt said that the exemption had been made so that employers would not be discouraged from offering training places, but she added that "there is a good case for improving the financial support for apprentices" and said there would be an announcement on the matter "shortly".

Unions today welcomed the announcement. TUC General Secretary Brendan Barber said: "unions will be delighted that their campaigning has paid off."

"Since it was launched five years ago the number of people benefiting from the Minimum Wage has at least doubled and employment has reached record levels," he adde.

"Unions will be pleased that their campaign for a minimum hourly rate for young people is going to pay-off for 50,000 low paid teenagers.

"This will cut out the worst examples of wage exploitation, and the £3 introductory rate should mean that more significant increases can take place in future years."

But the CBI said that while firms accepted the idea of a minimum wage for 16 and 17 year olds, the change would "bite with more businesses than ever before".

"The CBI understands why this has been done," said Deputy Director-General John Cridland, "but the jury is out on whether it will do more harm than good."

The CBI said the sectors most affected would be hospitality, retail, business services, social care, textiles, agriculture, leisure and hairdressing.