Despite claims by the Low Pay Commission that 20 years of the National Minimum Wage (NMW) has had a transformative effect on the UK labour market, the TUC argues that young workers are still getting a raw deal.

According to an analysis by the TUC published on the 20th anniversary of the NMW earlier this month, the average minimum wage worker who is between the ages of 21 and 24 is earning £800 a year less than those who are over 25.

Currently the hourly rate for those who are 25 and over is £8.21 while those between 21 and 24 are only entitled to £7.70 an hour. As a result, the TUC has estimated that these young workers are missing out on £200 million a year in minimum wage pay.

It is therefore calling on the government to mark the anniversary of the NMW by bringing all over 21s onto the full minimum wage rate and for the minimum wage to be raised to £10 an hour as soon as possible.

In contrast, the Low Pay Commission claims that the introduction of the NMW has meant that the very lowest paid now have hourly pay around £2.70 more in real terms than would have been the case had the NMW not been introduced, equating to £5,000 a year for a full-time worker.

It also accepts, however, that despite predictions 20 years ago that introducing the NMW would destroy jobs, the overwhelming weight of evidence now shows that the minimum wage has achieved its aims of raising pay for the lowest paid without harming their job prospects.

Hence the TUC’s argument that all over 21s should now be brought onto the full minimum wage rate. According to its calculations an estimated 337,000 21-24s would get a pay rise (both those currently on the minimum rate and those on slightly more than the 21-24 minimum but below the 25+ minimum).

Matthew Pull, of Thompsons Solicitors, commented: “The 20th anniversary of the introduction of the National Minimum Wage (NMW) is a fitting time for a reflection on its impact, and its welcome to see the admission in the Low Pay Commission’s report that the concerns at the time of the introduction of the NMW would destroy jobs have proved unfounded. Also welcome is the acknowledgement that the NMW has served to increase the pay of employees across the workforce, and not just the lowest paid, as a result of a positive “ripple effect” on pay distribution. However as the TUC point out, there is still work to be done, and it can only be hoped the Government takes on board the TUC’s suggestions regarding increases to the level and scope of the NMW”.

The TUC analysis can be read in full on their website.

To read the report of the Low Pay Commission, go to the government website