Youth Unemployment Soars to 14%, Highest Rate in Nearly 11 Years
Recent figures reveal that the unemployment rate for individuals aged 18 to 24 has climbed to 14% in the three months leading up to December. This marks the highest level in nearly 11 years, excluding periods impacted by the Covid-19 pandemic. The alarming statistics have ignited a heated debate over government policies aimed at supporting young workers.
Ministers Consider Scrapping Minimum Wage Equalisation Pledge
According to a report in The Times, ministers are actively reviewing a key Labour manifesto commitment to pay young people the same national minimum wage as older workers. Business groups have reportedly warned the government that increasing hiring costs through rises to the national living wage, expanded employment rights, and higher national insurance taxes are "pricing a generation of young people out of the workplace."
In response, officials are reconsidering their promise to equalise national minimum wage rates by the time of the next election. A decision on this matter is expected within months, coinciding with the government's annual remit to the Low Pay Commission, which advises on adjustments to the national living wage.
Current Wage Structure and Political Reactions
Currently, the national living wage—the government's term for the full minimum wage—applies only to workers aged 21 and over. Those between 18 and 20 receive a lower rate, officially designated as the national minimum wage, with an even lower rate for individuals under 18.
Welsh Secretary Jo Stevens addressed the issue on the Today programme, stating that The Times report does not reflect official government policy. "There's an unsourced briefing or whatever in The Times this morning, that is not government policy," she asserted. "Government policy is as we set out in our manifesto." Stevens highlighted historical skepticism about the minimum wage, noting that predictions of mass unemployment following its introduction in 1998 never materialised.
Controversy Over Potential Policy Changes
Despite Stevens' comments, sources indicate that ministers may abandon the goal of raising the youth rate to match the adult rate entirely, instead considering a slowdown in the equalisation process. This potential shift has already drawn criticism from union representatives.
Andy Prendergast, national officer for the GMB union, expressed strong opposition on the Today programme. "We'd be extremely unhappy about that. This is a manifesto promise," he said. Prendergast argued that younger workers are not less productive and that businesses hire based on need rather than age. He criticised the recurring narrative that minimum wage increases lead to unemployment, pointing out that such predictions have consistently failed over the past 27 years.
Broader Political Context and Upcoming Events
Labour leader Keir Starmer is expected to address the issue during a visit to Wales, where he and Welsh First Minister Eluned Morgan are promoting plans for rail investment, including the opening of seven new stations. Meanwhile, Reform UK's newly appointed Treasury spokesperson, Robert Jenrick, is scheduled to deliver a speech later today.
The ongoing discussion underscores deep divisions in economic policy, with business interests clashing with labour rights advocates. As youth unemployment remains a pressing concern, the government's forthcoming decisions on minimum wage equalisation will likely have significant implications for both the labour market and political landscape.
