Million young workers lose out on £3,500 a year due to lower wages

Thursday 5 July 2018

Million young workers lose out on £3,500 a year due to lower wages, says Young Women’s Trust

YWTUp to a million workers under the age of 25 are losing as much as £3,513 a year because they are not entitled to the National Living Wage, according to Young Women’s Trust, a charity that supports young women on low pay, ahead of a parliamentary debate on the issue.

The charity, which has today released a report on minimum wage rates, analysed Office for National Statistics data to find that last year a million jobs held by those under the age of 25 were paid less than the £7.83 National Living Wage – the legal minimum for those aged 25 and over.

18-20 year-olds can be paid £1.93 less an hour, amounting to a loss of £3,513 a year for full-time workers. 21-24 year-olds can earn £819 a year less, despite many doing the same work as older colleagues and having the same outgoings.

For younger workers and apprentices, the situation is even harder. 16 and 17 year-olds are losing out on £6,607 each year as their legal minimum is £3.63 an hour less than the National Living Wage. The legal apprentice minimum wage of £3.70 is less than half the National Living Wage, leaving many struggling to take up or stay in the roles. Young Women’s Trust found that two in five are paying more to do their apprenticeship than they earn.

Holly Lynch, Labour MP for Halifax, has tabled a Private Member’s Bill in Parliament seeking to extend the National Living Wage to workers over the age of 18. The Bill will have its second reading on Friday 6 July.

A survey of more than 4,000 young people by the charity found that the two most popular policies among young people were raising the apprentice minimum wage (supported by 83 per cent) and introducing equal pay for equal work by extending the National Living Wage to under-25s (79 per cent). These policies were more popular than abolishing university tuition fees, which was supported by 59 per cent of respondents.

As well as receiving lower wages, under-25s who are job-seeking are entitled to less financial support than their older counterparts and to less Housing Benefit.

Young Women’s Trust chief executive Dr Carole Easton OBE said:

“Young people are being paid less for the same work and are increasingly struggling to make ends meet. For young women, breaking out of low pay can be especially hard.

“We all need a basic amount of money to get by, no matter how old we are. The bus to work costs the same, whether you’re 24 or 26. Gas and electricity costs the same. Rent doesn’t cost any less in your early 20s.

“Politicians should support young people seeking to be financially independent by significantly increasing the apprentice minimum wage and changing the law to ensure under-25s are entitled to the same National Living Wage as everyone else. This would benefit businesses and the economy too.” 

ENDS

Notes to editor:

  1. Young Women’s Trust supports and represents women aged 16-30 trapped by low or no pay and facing a life of poverty. The charity provides services and runs campaigns to make sure that the talents of young women don't go to waste.
  2. The National Living Wage is the legal minimum for those aged 25 and over and is £7.83 an hour. Workers under the age of 25 are not entitled to this wage.
  3. Young Women’s Trust today released a new report, ‘Paid Less, Worth Less?’, making the case for extending the National Living Wage to under-25s.
  4. The minimum wage for 21-24 year-olds is £7.38 an hour. For 18-20 year-olds it is £5.90 an hour. Based on a 35 hour working week, this amounts to a loss of £819 and £3,512.60 a year respectively because young people are entitled to lower wages (see table).
  5. 16-17 year-olds are legally entitled to £4.20 an hour and apprentices to £3.70, which is £4 an hour less than the National Living Wage.

 

Hourly minimum wage

Daily minimum wage (seven hour day)

Weekly minimum wage (35 hour week)

Monthly minimum wage (annual wage divided by 12)

Annual minimum wage (52 weeks of working 35 hours)

How much they miss out on each year by not earning the National Living Wage

Apprentice

£3.70

£25.90

£129.50

£561.17

£6,734

£7,516.60

16-17

£4.20

£29.40

£147

£637

£7,644

£6,606.60

18-20

£5.90

£41.30

£206.50

£894.83

£10,738

£3,512.60

21-24

£7.38

£51.66

£258.30

£1,069.25

£13,431.60

£819

25+

£7.83

£54.81

£274.05

£1,187.55

£14,250.60

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  1. The Office for National Statistics’ ‘Distribution of low paid jobs by 10p bands’ data (October 2017) shows that 1.07 million people under the age of 25 are paid less than the National Living Wage. 558,000 of these are women.
  2. Young Women’s Trust commissioned ComRes to interview 500 current or recent apprentices in Great Britain online between 26th July and 11th August 2017. Data were weighted by age and gender. The survey found that 43 per cent, or two in five, said the costs associated with doing an apprenticeship such as travel to work, buying clothing or paying for childcare, were higher than their earnings as an apprentice.
  3. Holly Lynch MP sponsored a Private Member’s Bill to extend the National Living Wage to workers aged 18 and above. The Bill had its first reading in the House of Commons on 19 July 2017 and is due to have its second reading on Friday 6 July 2018.
  4. Young Women’s Trust commissioned Populus Data Solutions to conduct a survey of young people. A representative sample of 4,010 18-30 year-olds in England and Wales, from the Populus Live Online Panel, were surveyed between 4 and 14 July 2017. The survey found that, out of a range of options, the two most popular policies were raising the apprentice minimum wage (supported by 83 per cent) and introducing equal pay for equal work by extending the National Living Wage to under-25s (supported by 79 per cent). This compares to the 59 per cent that supported abolishing university tuition fees.
  5. Young Women’s Trust has launched a digital campaign and a Change.org petition calling on the Government to extend the National Living Wage to under-25s. More information on how to get involved can be found at www.youngwomenstrust.org/paid-less-worth-less.
  6. For more information or to speak to a case study, please contact Bex Bailey on bex.bailey@youngwomenstrust.org or 07963018281.

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