Skip Content

News

Is it right to pay someone less just because of their age?

3 October 2008

The Employers Forum on Age calls for equalisation of minimum wage rates for all those over 18

This week The Employers Forum on Age (EFA), an independent network of leading employers who recognise the value of an age diverse workforce, will submit evidence to the Low Pay Commission, calling on the Government to address the inequalities faced by the younger end of the workforce, and commit to equalising the minimum wage for 18 year olds up.

The development rate Under current legislation it is legal to pay 18 to 21 year olds on the National Minimum Wage a lower development rate, (£4.60 an hour, increasing to £4.77 in Oct 08), compared to the minimum wage applied to those 22 and over, (£5.52 an hour increasing to £5.73 in Oct 08). Crucially, these development rates can be applied irrespective of an individual's job or responsibilities. The EFA believes that this constitutes direct age discrimination.

Catharine Pusey, Director of The Employers Forum on Age comments, "There is a consensus that it is wrong to pay a woman less than a man or to pay a black person less than a white. Why then do we think it is right to pay someone less simply because they are younger? Under current UK law a 21 year old could be doing exactly the same job as a 22 year old, but legally the employer can pay the 21 year old less, simply because they are younger."

Common objections to an equalisation of the minimum wage are:

  • "The extra salary cost to the employer would be prohibitive."
  • "I justify paying my younger recruits less because they cost me more in training."
  • "Changing the legislation will simply mean higher unemployment amongst the 18-21 year olds."
  • "A lower minimum wage for young people provides incentives to remain in full-time education until the age of 21."
  • "Increasing wages will reduce the training opportunities for younger workers."

The EFA has commissioned research to investigate the potential economic effects of raising the development rate to the standard rate and found that the number of people who would benefit is in fact higher than the number who would lose.*

Catharine continues, "On the basis of our research and analysis we believe that a removal of the development rate would have minimal negative impacts on employment for 18 to 21 year olds and that it is likely, in the long run, the positive impacts would more than offset the negative impact."

- End -

< Back