​Proposal to Extend National Living Wage to 18+

The Low Pay Commission (LPC) proposes a significant shift towards economic fairness by recommending that the government extend the National Living Wage eligibility to individuals aged 18, down from the current threshold of 21. This recommendation emerges from a comprehensive analysis of the future trajectory of the National Minimum Wage, aiming to bridge the pronounced wage disparity that stakeholders deem "excessive and unfair."

Currently, wage structures categorise workers into different brackets: apprentice rate, rates for 16 to 17-year-olds, 18 to 20-year-olds, and those 21 and over qualify for the National Living Wage. The plan to increase the National Living Wage to £11.44 an hour by April, achieving the target of two-thirds of median hourly earnings, contrasts sharply with the modest gains of younger workers despite a 14.8% hike in their wage rate.

This imbalance has spurred the LPC to advocate for a closer alignment of youth wages with adult rates, stressing the potential benefits to young workers' morale and labour market engagement. However, this initiative is met with caution from sectors like hospitality, where the reliance on youth rates is significant. UKHospitality emphasises the importance of a measured approach to wage adjustments to avoid detrimental employment impacts, advocating for increases aligned with average earnings growth post-2024.

Acknowledging the complexities involved, the LPC suggests a phased approach to lower the age eligibility for the National Living Wage, allowing for a careful assessment of impacts across different age groups. It emphasises the necessity of a holistic policy perspective, ensuring minimum wage adjustments complement broader economic and social objectives without unintended negative consequences.

The LPC's role as an independent advisor highlights the delicate balance required in wage policy formulation, underscoring the importance of nuanced, evidence-based strategies to foster economic inclusivity and fairness.

We welcome your thoughts on this proposed shift in wage policy. How do you see it impacting businesses and young workers alike? Please share your insights below.