Equal minimum wage interview - the response by the TUC

Following this interview with David Coats on the youth minimum wage, Raj Jethwa (right) has responded on behalf of the TUC.

David Coats had argued that an equal minimum wage would "place the most vulnerable young workers at a much higher risk of unemployment" and that "we should not implement policies that place the most vulnerable at risk".

In reponse, Raj Jethwa argues that young people should get "the rate for the job" and that "If an 18 year old can stack shelves as well as the 22 year old, then there can be no justification for a lower minimum wage for the 18 year old".

RAJ JETHWA ON THE YOUTH MINIMUM WAGE
At 16 you can get married. At 17 you can learn to drive. At 18 you can vote. And at 21 you can stand for Parliament. But you still have to wait until you are 22 to qualify for the adult minimum wage. That’s something which the TUC takes issue with. At the very least, we believe that the adult rate of the National Minimum Wage should be payable at 18.

The first point to identify is that this is a very specific sectoral issue. The vast majority of young people work in either retail or hospitality and, while there are some very good employers and some very good trade union recognition agreements, these are sectors which are known on the whole for high levels of casualisation, low average rates of pay and low rates of union membership.

By allowing an exemption for young workers, the Government is, in effect, allowing exemptions for large sectors of the economy which are not exactly known for decent employment standards. Also, given the low investment in skills in these sectors, the idea that the age exemption is justified because people under 22 are being developed into fully effective workers is difficult to sustain.

A few years ago, the TUC published a report entitled Pay, Poverty and Pensions – a Policy Agenda for Young People. That report showed that among households with children, more than half of families where the head of household is under 25 live in poverty. This is astounding. For households without children, nearly a quarter of those headed by someone under 25, live in poverty. Both of these figures are well above the national averages.

There is, of course, an argument that some employers won’t be able to pay higher rates without it having an impact upon their profits and their viability; but in the trade union movement we believe in the rate for the job. And those employers that rely on cut-price wages for young workers as a survival strategy don’t fill me with confidence about their long-term business prospects.

In any case, the reality is that employment has grown considerably over the last decade. We have a record number of people in work, alongside the introduction of a minimum wage. In that time, the minimum wage has grown consistently ahead of both inflation and average earnings. And, despite a slight stall to begin with, the trend has continued of most employers starting adult pay rates from either 18 or 16, even in retail and hospitality.

So why do we fear that if we raise wages for younger people, that unemployment for them will also rise?

If pay is a recognition of value, then, by definition, minimum wage jobs are the jobs we value the least. The only reason that young people get near those jobs is because, at those wages, nobody else will want to do them. So what happens if you raise the Development Rate to the adult rate? Well, so the argument goes, employers will sack young people in favour of older workers. But why should that be the case? Surely, if an 18 year old is capable of doing a job when it pays £4.45 an hour, then they are certainly capable of doing that job when it pays £5.30 an hour.

What is it about our society that we automatically value older workers over younger workers? Even though, quite obviously, young people prove themselves just as able to do minimum wage jobs? Remember employers who do employ young people at lower rates aren’t doing it out of the kindness of their hearts. They’re doing it because young people are making a contribution to their businesses.

And also remember, employers are usually in a position of strength in the labour market. If employers pay lower wages to younger workers, then they send a signal. A signal that they do not expect young people to make the same contribution as older workers.

And, you know, you get what you pay for. If you want young people to make a full contribution in the workplace, to be equal citizens, then pay them an equal minimum wage.

If an 18 year old can stack shelves as well as the 22 year old, then there can be no justification for a lower minimum wage for the 18 year old, or the 19 year old, or 20 year old or the 21 year old.

That is a fundamental trade union principle – and it should be the hallmark of a decent society.

Raj Jethwa
Trades Union Congress (TUC)

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