Youth unemployment has risen, creating disagreement within the government about how quickly to deliver Labour’s promise to pay 18- to 20-year-olds the full minimum wage. Peter Kyle is understood to oppose immediate implementation, while others argue there is little evidence that recent minimum wage increases for low-paid workers reduce unemployment. Torsten Bell cites the Low Pay Commission’s annual report, which found no evidence that prior youth minimum wage increases affected employment. A government-backed report by Alan Milburn found youth unemployment costs Britain more than £125bn per year and that the number of young people not working or studying has exceeded one million for the first time in over a decade. Calls have followed to slow youth minimum wage increases, especially in low-margin sectors hit by the cost of living.
"If you look at what the Low Pay Commission said in their annual report, they didn't find evidence that previous increases in the minimum wage for young people had had an effect on their employment."
"To get the jobs there for them, you've got to make sure the employers are willing to take the risk. If you're in, say, the hospitality sector or the retail sector, margins tend to be very low. These tend to be sectors that were really badly hit by the cost of living, hospitality in particular."
"Milburn's report revealed the number of young people not working or studying had surpassed a million for the first time in more than a decade, prompting calls to reduce the pace of youth minimum wage increases."
"Tony Blair, the former prime minister, warned in an essay this week that policies such as increasing the minimum wage which he brought in had created headwinds, not tailwinds, for businesses."
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