The national statutory minimum wage is, in the view of many, the most socially significant piece of legislation any government has ever introduced. Despite the claims of its critics, it has not resulted in mass bankruptcies and job redundancies. It has meant a real improvement for nearly one and a half million, mostly women and part-time, workers.
It is, however, seriously flawed in that it makes no provision and provides no protection for sixteen- and seventeen-year-olds. While Usdaw has negotiated decent pay rates for youngsters in all of its voluntary agreements with the major and medium sized employers, young people, in non-unionised workplaces, can be paid, quite legally, as little as 50p per hour – or less!
There are still unscrupulous employers taking full advantage of this gaping hole in employment law.
Sadly, those most likely to be exploited are the physically handicapped or people from the ethnic minority communities, who have virtually no bargaining power when it comes to finding a job. The government continue to argue that, to apply the full minimum wage at eighteen, with proportionate rates for sixteen- and seventeen-year-olds, would jeopardise the job prospects of youngsters. But if this were true, then the question must be asked as to why employers reach voluntary agreements with Usdaw and other trade unions which provide for the adult rate to be paid at eighteen with proportionate rates for sixteen- and seventeen-year-olds?
This is somewhat reminiscent of the prejudice displayed by the Tories when, in 1986, they removed wages council protection from workers under the age of 21. They argued this was necessary to allow young people to ‘price themselves into jobs’. What was the result of this economic experiment? In the years that followed the opposite happened: youth wages plummeted and youth unemployment rocketed. There are no convincing economic arguments to justify this continuing injustice and young exploited workers are sadly the victims of prejudice and ignorance.
Usdaw holds the strong view, that rather than destroy job prospects for sixteen- and seventeen-year-olds, the introduction of a legally binding minimum wage would enhance their chances of continuing employment. As things currently stand, unscrupulous employers have a clear incentive to sack youngsters when they reach the age of eighteen and become entitled to a minimum wage. The same argument applies equally to those workers aged between the ages of eighteen and 21 who, from October this year, will continue to receive only 85 percent of the adult rate – £3.50 as opposed to £4.10.
Being totally arbitrary, taking no account of the individual’s contribution or loyalty to a business, the differential rate actively encourages unscrupulous employers to sack people on reaching the age of 22 and take on younger, cheaper replacements.
Ever since the Labour Party adopted a national minimum wage policy Usdaw has maintained that anyone achieving adulthood and taking on the responsibilities of being a voter and taxpayer should receive at least the full minimum wage.
It might be possible to make a case for paying a reduced rate to those who are undergoing an apprenticeship or recognised training leading to a relevant qualification. In the retail and service sectors, as well as the unskilled areas of manufacturing industry, many young workers receive little or no training and should be protected and not allowed to constitute a large pool of cheap labour.
Many employers, thankfully, are ahead of the government in both appreciating and rewarding young people who they see as adding value to the business and forming the basis of the future workforce. A graphic illustration of this confidence in young people was the action of the Co-operative employers, not the most profitable in the retail sector, who have now abolished, in agreement with Usdaw, the rates for sixteen- and seventeen-year-olds and introduced a common under-eighteen rate of £3.55 per hour.