Although it was a hard decision to make, according to Vince Cable, there will not be a rise in the minimum pay rate for young people. Rates are frozen for the moment for anyone under 20 years of age but adults will see an 11pc increase, bringing their minimum to £6.19 per hour.
There are approximately one million workers in the UK who are under the age of 25 and this legislation will affect all of them. Mr. Cable said that raising the rate will actually only hinder job availability as employers may not be in a position to pay increased wages. Those in the 16 to 17 year age range will continue with the minimum of £3.68 and those between the ages of 18 and 20 will remain at £4.98 per hour. Yet apprentices will see a pay rise of 5p so that they will now be entitled to a minimum hourly wage of £2.65.
Adults will see an increase in their minimum hourly wages effective October of this year as their pay will rise from £6.08 to £6.19, a rise of 11p per hour. However, there is some amount of concern over the rising cost of labour during this time when unemployment is extremely high. The Business Department believes that workers should carefully look at which is more important, higher pay or the availability of jobs. If employers cannot afford these higher pay rates then joblessness may rise even further.
On the other hand, the General Secretary for TUC believes that there really isn’t clear evidence of a correlation between minimum wage and job availability. Rather, Brendan Barber believes that it is low confidence in government’s ability to turn the economy around which is causing employers to be reluctant to hire new workers.
