Minimum Wage Discrimination Must End - Swinson

6.45.28pm BST (GMT +0100) Tue 10th Oct 2006

Liberal Democrat Shadow Secretary of State for Scotland, Jo Swinson MP, today asked Douglas Alexander whether he agrees that that maintaining a different minimum wage for young people is unacceptable. Ms Swinson has calculated that 56,000 young people in Scotland are paid less than their older counterparts for doing the same work.

Commenting, Ms Swinson said:

"It is deplorable that the Government discriminates against young people in this way.

"With the implementation of recent age discrimination legislation, the Government has accepted that age cannot be used as an indication of the quality of an individual's contribution. It is absurd that someone aged 16 can be paid less than someone aged 18, who in turn is paid less than someone aged 21.

"The blanket approach of lowering the minimum wage for all 16-21-year-olds to give them an advantage in the job market may help in some cases, but for all young people to be paid less to improve the job prospects of a few is unfair.

"I applaud the stance of companies such as ASDA, which recognise this and have recently announced equal pay plans for workers regardless of age."

ENDS

Notes to Editors:

1. Jo Swinson asked:

An estimated 56,000 Scots between the ages 16 and 21 are earning less than their older colleagues, solely because of their age.

Does the Minister agree that this age discrimination is probably illegal and certainly unacceptable, and that lower minimum wage rates for young workers must go?

2. The national minimum wage is currently decided on the basis of three tariffs:

· A rate for adults (those aged 22 and over), who receive the full rate of £5.35 an hour

· A 'development rate' of £4.45 an hour, which is paid to workers aged 18 to 21 inclusive

· A rate for young people (those older than school leaving age and younger than 18) of £3.30 an hour.

There is also a "training rate" of up to £4.10 an hour for workers aged 22 years and over who are starting a new job with a new employer and doing accredited training.

3. The estimated figure of 56,000 is extrapolated from the 2005 Annual Survey of Hours and Earnings. http://www.statistics.gov.uk/pdfdir/ashe1105.pdf>

Using the Gross Hourly Pay of all UK employees, broken down by age, there are 434,000 16-17 year olds and 1,472,000 18-21 employed in the UK. Within this data, the percentiles are broken down to hourly wage. This can be found on the ONS website

http://www.statistics.gov.uk/downloads/theme_labour/ASHE_2005/2005_age.pdf>

(Table 6.5a)

By applying the October 2005 minimum wage rates (£3.00 for 16-17 year olds, £4.25 for 18-21 year olds and £5.05 for 22+ years) to the percentiles, the estimates reveal that approximately 60% of 16-17 year olds are earning less than the full adult minimum wage, and approximately 25% of 18-21 year olds are earning less than the full adult minimum wage.

434,000 - applying 60% = 303,800

1,472,000 - applying 25% = 368,000

This totals 628,400 for an estimated figure for the UK

The total number of employee jobs in Scotland is then divided by the total number of employee jobs in the UK

2,140,000 divided by 23,606,000 equals 9%

See table 5.5a at http://www.statistics.gov.uk/downloads/theme_labour/ASHE_2005/Table5_5a.xls>

The UK figure of 628,400 then has the 9% Scottish level applied to it, thus arriving at the total figure of 56,556. This is the estimated number of young people in Scotland who would benefit from the National Minimum Wage were it at the same level as adult minimum wage.

These figures are an estimate as the exact data is not available in the public domain from either the ASHE survey, the Office of National Statistics or the Department for Trade and Industry.

4. On 4th October, ASDA announced that staff under 18 would be paid the same as their colleagues over 18. Further information can be found at http://www.asda-press.co.uk/pressrelease/55>