Minimum Wage for 16-18 Year olds

The minimum wage for workers aged 16-18 is £4.55 (April 2020-21)
For workers, aged 18-20 is currently £6.45 (April 2020-21)

Readers Question: What are the minimum wage rates for 16, 17 and 18-year-olds. Should the minimum wage be increased?  Should there be a minimum wage rate for children under 16?

Minimum Wage Rates from April 2020

  • £8.72 –  25 and over
  • £8.20 – Age 21-24
  • £6.45 – Age 18-20
  • £4.55 – Under 18
  • £4.15 – Apprentice rate. (An apprentice means the firm has to devote a certain time to training the worker. Traditionally apprentices get lower pay to compensate the firms’ cost of training them.

Can 13, 14, and 15-year-olds get a minimum wage rate?

No, the minimum wage rate only applies to workers who are 16 and above.

The youngest age your child can work part-time is 13 years old, with the exception of children involved in: television, drama, film. [1. Child employment Direct gov]

Do young workers benefit from a national minimum wage?

national-minimum-wage-pros-cons

Benefits of Min Wage

  • A minimum wage is an effective tool for increasing wages of the lowest paid group of workers.
  • Since the minimum wage has been introduced in 1997, unemployment has fallen, suggesting fears over real-wage unemployment have been misplaced.
  • Minimum wages can increase labour productivity. Workers can feel more motivated with higher wages (efficiency wage theory). Also, if firms have to pay more, then they have an incentive to invest in workers and capital to increase labour productivity.
  • In an era of low real wage growth, the minimum wage has played an increasing role in causing higher living standards.

Concerns over minimum wage

  • An argument advanced is national minimum wage increases costs for firms and this can discourage employment opportunities. If the minimum wage rate rises too fast, it could cause unemployment in the future.
  • The gap between workers under 18 and over 25 means that firms have a cost incentive to substitute older workers for younger workers. In labour intensive industries (e.g. fast food) firms may prefer to give longer hours to the youngest workers because they are nearly 50% cheaper than mature workers.
  • Blackmarket. Another issue is that a legal minimum may encourage firms to pay young workers in cash and avoid legal restrictions.
  • Regional inequality of wages. A national minimum wage can cause unemployment in the northeast (where wages are low) but have little effect in London, where wages are higher.

Does a minimum Wage encourage Labour market Participation?

  • In theory, increasing the minimum wage for 16-18 year old workers would increase the incentive to join the labour market because work will become more attractive compared to studying at school and not earning.
  • However, the minimum wage for 16 and 17 year-olds is still relatively low. It is £4.20 for people under 18. Therefore, the benefit of working on the minimum wage may still seem insignificant compared to the benefits from studying and getting qualifications which will enable higher lifetime earnings.
  • Also, many 16 and 17  year-olds probably live rent free therefore there is not the same economic necessity to go out and get a job.
  • Personally, I think the effect of a minimum wage for 16-18 year olds is relatively insignificant, I can’t think of many students who would give up A-levels just so that they could go and work in McDonald’s for £4.20 an hour.
  • What is most likely is that there will be an increase in the participation of young workers doing part-time jobs in addition to studying full time.

Case for Increasing the Minimum Wage Rate

  • Unfair firms can pay a lower wage rate to young workers doing the same job as people over 21.
  • Efficiency Wage Theory – the idea if you pay a higher wage, you will get greater motivation and labour productivity.

Problems of Increasing the Minimum Wage Rate for young workers

  1. Could lead to unemployment and fewer job opportunities. Many firms may be unwilling to employ workers if there is a significant increase in the minimum wage rate. This would particularly affect labour-intensive industries like hairdressers and cafes.
  2. Arguably young workers lack experience, and so firms need to spend time and money on training them. Therefore a lower minimum wage rate is justified to pay for the costs of on-the-job training.

How Does the UK compare to other countries?

The UK minimum wage compares well compared to other countries like the US, Spain and Portugal, but still lower than some EU countries. International minimum wage rates

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237 thoughts on “Minimum Wage for 16-18 Year olds”

  1. Hi, im 17. ive been working for a marstons pub since feb 2011. i work 8pm – 2am every friday and saturday for £3.64. this might be the minimum wage but its ridiculous for the hours and effort!!

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  2. you discussed me by saying that about mcdonalds! I work there and I’m 17 and they do not pay £3.64 an hour! How dear you! At least I get off my bum and earn my own money, I am independent and do not get anything like EMA so I have no choice to work because I wouldn’t be able to afford anything.

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  3. Responding to Mathew R, i think you will be better off getting a new job. the pay isn’t worth the hours you are doing

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  4. im 15 and still lookin for a job, if any body can help me please mail me on facebook. (jessiicaa wilkinson) thanks.

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  5. i used to work at a hairdressers in my town at the age of 13 and for the full day from 8am till 6pm i used to get paid £13. now 18 i have realised that what they were doing was wrong and i advise any young teenagers to make sure that they are getting paid minimum wage.

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  6. Im 17 and I work 60 hours a week for £90 20 of which goes on lodge and the rest on food for work at the Start of each month I have to pay my contract so I have no money

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  7. Im 16 and have just started a job in a kitchen washing up. I get paid 5 pound an hour and work 12 hours a week earning myself 60 pound a week averaging 240 pound a week . Essentially im now loaded from standing around 🙂

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  8. im looking for a job in sainsbuys but i dont know what age i have to be.? does anyone have any ideas..? cheers if so please get back to me thankyou.!

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  9. you need to be at least 16 but cant work there while you are still at school, but can if you are in sixth form or college

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  10. Not good. Not good. It is terrible that people under 21 , (especially under-18s) get a raw deal when it comes to pay. I’m 17 and I don’t work but I have many friends who do and I can say for a fact that too many adults do not understand or care how hard so many of my peers work for what little money they end up getting. With the government we have at present I am dismayed that the minimum wage is unlikely to change any time soon.

    Reply
  11. i have been working at my at a agricultural dealer ship for two years now that has been recently taken over my previous boss had already told me when i turned 18 i would get a rise to 4.96 per hour but my new bosses wont allow it and now i have to travel an extra hour a day to get to and from work because they close my depot down is this hardly fair especial as i do the same jobs as someone on 6.50 an hour i am currently only on 3.65

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  12. I think you have a cheek saying I don’t know why any kid would want to give up a levels and get a job in mcdonalds. Everyone I know who’s done a levels are now trying to find a job. I’ve just left school and I’m getting a job in a shop and joining this website to get an agent and be on tv. So soon while I’m on tv in programmes earning a lot of money you come back to me and tell me how wrong I was for not doing a levels pahhh!

    Reply
  13. I have just worked a 24 hour shilft and i am 16 and get 5:46 an hour!!!!! I work in a hotel. !!!! This Is illlegal so all ur 8 hour shifts are nothing i normaly do 12 hour shifts for the same money as most u so Stop Moning!!?

    Reply

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