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date: 25 March 2009

embargo: 00.01hrs Friday 27 March 2009

End low pay for young workers, says TUC

The TUC will call on the Government to end the cycle of low pay for young workers at its Young Members Conference, which starts in Eastbourne today (Friday).

TUC Assistant General Secretary Kay Carberry will call on the Government to pay the adult minimum wage rate to 18 year olds - it is currently only paid from the age 22 - and scrap the exemption from the minimum wage for apprentices.

Kay Carberry will say: 'The economic downturn is having a disproportionate impact on young people. Unemployment has now broken through the two million barrier, and workers under 30 are one of worst affected groups.

'We are seeing hundreds of thousands of graduates competing for non-graduate jobs - leading to increased unemployment among non-graduates - and exerting further downward pressure on pay.

'The downturn is also impacting on young people's pensions. With so many companies closing final salary schemes to new entrants, young workers are suffering the consequences.

'We need to increase pay rates for those at bottom of the labour market - like the seven in ten 18 to 21 year old workers who are currently in low paid jobs, and who account for over a fifth of the low-paid workforce.

'As we seek to curb salary excess at top director level, we also need to boost pay at the bottom. This will speed up the process of economic recovery because increasing the disposable incomes of the low-paid is one of the best ways of increasing demand in the economy, and will create much more stability for the long-term.

'The minimum wage is one of great achievements of this Government - but as we celebrate its tenth anniversary, we can't afford to relax our guard.

'The TUC wants the adult minimum wage rate to be paid from 18 - because if 18 year olds can vote, get married and join the army, then there is no reason why they shouldn't be paid the same going rate for a job. Younger workers also often have similar commitments and outgoings to their older workmates.

'And the TUC is calling for the removal of the minimum wage exemption for apprentices - because far too many apprentices are being exploited by unscrupulous employers, and completion rates in some sectors remain poor.

'The TUC believes improvements in the minimum wage are both necessary and affordable. Necessary because a 20p an hour increase in the minimum wage would help low paid workers, while generating around £400 million of extra spending. And affordable because this would add just 0.06 per cent to the UK's pay bill.

'The TUC also wants to see public procurement used to support living wages -we've seen in the Greater London Authority how this can drive real improvements, and this example needs to be repeated across the public sector.'

NOTES TO EDITORS:

- The TUC Young Members Conference begins today (Friday) at the Eastbourne Centre. For more information please contact Matt Dykes on 020 7467 1245.

- The adult NMW is currently £5.73 an hour. Workers aged 18-22 receive £4.77 and those aged 16 and 17 get £3.53.

- Low pay sectors make up about a quarter of the economy. Sectors with a high incidence of low paid jobs include: retail, hotels, catering, bars, textile manufacturing, hairdressing, cleaning, security, agriculture and food processing.

- £400 million figure: Source: TUC estimate - this figure assumes 1.25 million beneficiaries receiving an increase of 20p per hour x the UK average working week of 34 hours x 52 weeks per year minus 10 per cent savings.

NMW employees as a percentage of industry pay bill and effect of a 20p increase:

Industrial sector	Number of employees (thousands)	Mean annual gross pay per employee (£)	Total pay (£ million)	Per cent minimum wage workers	Minimum wage pay as a percentage of industry pay bills	Per cent increase in total industry pay bill stemming from a 20p increase in the NMW
Agriculture, hunting and forestry	257	20,366	5,234	4.3%	2.4%	+0.08%
Textile, clothing and leather goods manufacture	98	20,909	2,049	9.5%	5.1%	+0.20%
Retail trade (not motor vehicle)	2,759	15,126	41,733	7.5%	4.3%	+0.14%
Hotels and restaurants	1,774	14,929	26,484	17.2%	10.2%	+0.36%
Social work activities	1,184	16,154	19,126	5.1%	2.9%	+0.10%
Investigation and security services	176	22,139	3,896	4.0%	2.4%	+0.10%
Industrial cleaning	456	12,129	5,530	19.3%	12.0%	+0.40%
Hairdressing and other beauty treatment	127	11,588	1,472	22.2%	16.9%	+0.54%
All GB jobs	26,400	26.020	686,400,528	4.7%	1.8%	+0.06%

- Sources: TUC estimates using ONS Annual Survey of Hours and Earning 2008 table 16.6a (hourly pay excluding overtime), ONS Economic and Labour Market Review, March 2009, table 6.05, LPC Report 2008 fig 2.1. Assumptions: employer on costs are not included as for the purposes of this estimate they are assumed to be distributed equally throughout the pay bill, and this does not affect the ratio of NMW pay to general pay. It also assumes that all workers in an industry work average hours. It therefore takes no account of the disproportionate amount of part-time workers who benefit from the NMW. This estimate assumes that all NMW workers earn the adult rate. Furthermore it also ignores those who are currently paid just above the minimum wage who may gain a pay rise as a result of an increase in the rate.

- This Saturday (28 March) the TUC will be part of the huge Put People First event which is made up of some 130 unions, development agencies, domestic poverty, faith and environmental groups. The alliance plans to tell world leaders attending the G20 summit - happening just five days afterwards on Thursday 2 April - that only just, fair and sustainable policies can lead the world out of recession.

- Put People First - March for Jobs, Justice and Climate starts from the Embankment at midday and culminates in a rally in Hyde Park which starts at 2.30pm.

- All TUC press releases can be found at www.tuc.org.uk

- Register for the TUC's press extranet: a service exclusive to journalists wanting to access pre-embargo releases and reports from the TUC. Visit www.tuc.org.uk/pressextranet

Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Elly Brenchley T: 020 7467 1337 M: 07900 910624 E: ebrenchley@tuc.org.uk

Press release (1,100 words) issued 27 Mar 2009