economy
UK government divided over minimum wage increase in face of youth jobs crisis
Exclusive: Some fear raising rate for people aged 18-20 will exacerbate unemployment while others point to lack of evidence
TL;DR
- A split exists within the UK government over the pace of implementing full minimum wage for 18- to 20-year-olds.
- Rising youth unemployment is a key concern, with some ministers fearing that increasing the minimum wage could exacerbate job losses.
- Others in government and external bodies like the Low Pay Commission state there is no robust evidence linking higher youth minimum wage rates to increased youth unemployment.
- A government-backed report by Alan Milburn highlighted that youth unemployment is costing Britain over £125bn annually.
- Labour's manifesto promised to equalize minimum wage rates for 18- to 20-year-olds with those aged 21 and over, but did not specify a timeline.
- Ministers have previously adjusted guidance to the Low Pay Commission to prioritize employment rates over youth unemployment rates when setting minimum wage recommendations.
- Trade unions and some MPs are urging the government to uphold its manifesto commitment without delay.