Ahmed, Bianca, and Christopher, work full-time in the same shop in London. They work the same number of hours, serving the same number of customers, with the same job description. Their friend Davina also works full-time, with a similar job description, for the shop next door.
Ahmed earns three-quarters of Bianca’s wage, and two-thirds of Christopher’s. He earns £10,304 less than Davina every year. Why?
Low wages, argue the Young Women’s Trust, have left young adults in a state of “suspended adulthood”. 39% of young women struggle to make ends meet at the end of the month, and a quarter have had to move back with their parents because they can’t afford to live independently. The picture is even bleaker for apprentices who can be paid as little as £3.50 an hour – the minimum wage rate for apprentices. Shockingly, the TUC recently reported that 135,000 (15%) apprentices in England are being cheated even of this, due to poor enforcement of the legal minimum.
Excluding young people under the age of 25 from the National Living Wage was justified by the government as a way to encourage employers to take on younger, less experienced people. Yet, a recent report by New Policy Institute found no evidence to support this claim and – paradoxically - they found that wage differentials can impact the employment prospects of people approaching, or just turned 25.
Others have justified the difference by arguing that young people are less likely to have dependents, mortgages, or other responsibilities. Not only is this a false generalisation – with many parents under the age of 25 – by the same justification, a surgeon with no dependents should earn less than the Health Assistant with three children. It is assumptions such as these that are part responsible for 1 in 12 young parents relying on foodbanks to survive.
Last month marked Citizens UK’s celebration of Living Wage Week. This is an annual celebration of a growing number of employers across the UK who pay their staff a real Living Wage – as accredited by the Living Wage Foundation. 3700 organisations have now joined the employer, worker and civil society movement, which believes that a hard day’s work deserves a fair day’s pay. Over 150,000 workers receive an annual pay rise – in line with the cost of living – as a result, with £630 million pounds put into the pockets of low paid workers since 2001. But while there is a lot to celebrate, the week also highlighted the biggest losers: two-thirds of young people are still paid less than the real Living Wage .
For LUSH sales assistant Molly, a student from working class family, being paid the real Living Wage has allowed her to buy books and go on field trips for university, and work a little less, so she can study a little more. It has also given her more options – she can now put a little money aside each month to save for a Master’s degree – something she never believed would be possible before.
Paying young people the real Living Wage not only improves the lives and prospects of people like Molly – it also makes business sense. Since becoming a Living Wage employer, businesses have reported enhanced reputations, improved relations between staff and managers, greater recruitment and retention, and increased commitment and motivation among employees .
As having a skilled and innovative workforce of tomorrow is important for productivity and retaining a competitive economy, enabling young people to upskill is also important for the UK. Our partner employers Atkins, Wieden + Kennedy, and J.P. Morgan are going beyond pay, to train our young people and help them to access the creative and engineering industries.
We hope that more employers will follow in the footsteps of these trailblazing companies.
Answer: The National “Living” Wage.
Ahmed is 18 years old, and entitled to £5.60 per hour
Bianca is 21 years old, and entitled to £7.05 per hour
Christopher is 25 years old, and entitled to £7.50 per hour.
Davina is also 18 years old. Her employer pays the voluntary London Living Wage of £10.20 per hour.