Minimum wage increase below inflation for under 21s

The minimum wage is due to increase by 12p per hour for adults but only 4p and 5p for under 21s.

Business Secretary Vince Cable defended the 1% rise for the young, which is less than the rate of inflation, amidst on-going rows over rewards to top executives and bankers.

The national minimum wage is to rise by 12p an hour for adults to £6.31 from October 2013 but the rate for 18-21 year olds will rise by only 5p an hour to £5.03 and by 4p an hour to £3.72 for 16-17 year olds.  The rate for apprentices will be raised by 3p an hour to £2.68.

The increases, can be seen as an improvement on last year’s freeze of the minimum wage for the under 21s and calls from the Low Pay Commission to freeze the rates for apprentices. 

Cable said the lower rise for young people was in recognition of the high unemployment rates amongst the young.  He also said it was important for apprentice and youth rates wage rates to keep up with increases in benefits which are rising by 1%.

TUC General Secretary Frances O’Grady said:

“Boosting the incomes of the low paid goes straight into the economy and wage-led growth must be part of the recovery, so we would have liked to have seen minimum wage rates go up further today, even if the government has rightly rejected calls for a freeze.”

Cable announced a crackdown on the ‘abuses of the minimum wage’ such as unrecorded wages, restaurant managers making assumptions about tips and other employers making deductions for uniforms.

Facing pressure from campaigners in London who are calling for a ‘living wage’ of £8.30 per hour, the Business Secretary called for a debate around the figure to take into account regional differences and ensure the campaign was “grounded in evidence rather than based on rhetoric and political point scoring.”

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