30/11/2017
Boost for young workers in 2018 NMW rates (UK)
Workers between 18-20 and 21-24 will benefit from their largest percentage rises in National Minimum Wage rates for a decade on 1 April 2018, when recommendations for National Minimum and National Living Wage rates will help fulfil the Low Pay Commission’s commitment to restore relativities lost during the recession, when it recommended lower increases for young people to protect their employment.
The LPC estimates that between 260,000 and 360,000 young people will benefit directly from the 4.4% increase (33%) that will bring the 21-24 year old rate to £7.38 per hour and the 5.4% increase that will bring the 18-21 year old rate to £5.90.
It also reckons many more young people will benefit from ‘spillover’ effects further up the pay distribution and – even though they are not entitled to it – from increases in the NLW. In total, it estimates that up to 45 per cent of 18-24 year old workers – or 1.3 million young people – could receive a higher pay increase than they would have done in the absence of the NLW.
Other NMW and NLW rates listed and explained in the LPC’s 2017 report and supporting documentation and subsequently accepted by government comprise
- 4.4% (33p) increase to £7.83 for the NLW
- 3.7% (15p) increase to £4.20 for the NMW, 16-17 year olds
- 5.7% (20p) increase to £3.70 for the NMW, apprentices
The slightly lower, 3.7% increase for 16-17 year olds reflects the fact that earnings and opportunities have not increased for this group as much as they have for others, although it is still its highest increase in 10 years.
In addition to the report itself, ‘National Minimum Wage: Low Pay Commission report 2017’ links to a document setting out the report data tables and a letter from the Bryan Sanderson, chair of the LPC, to the secretary for state summarising the “key evidence supporting the rationale for (its) recommendations”.
In his letter, Mr Sanderson noted that “…compared to when we last reported, fears of a recession following the decision to leave the European Union have abated and short-term confidence appears stronger. However, uncertainty about the medium term is likely to remain high until there is greater clarity.
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