The national minimum wage adult rate could be increased with effect from 1 October 2012, but the rates paid to younger workers are "most likely to be frozen" in 2012/2013. This is according to the Daily Telegraph
The CIPD last year called for the national minimum wage rates paid to younger workers to be frozen in 2012/2013.National minimum wage rates for younger workers 'most likely to be frozen' in 2012/2013, says Telegraph
Given the current backdrop of ongoing economic uncertainty, rising unemployment and falling inflation, news of the annual
increase (or otherwise) to the national minimum wage for 2012/2013 (due to come into
effect on Monday 1 October 2012) will be particularly closely watched.
The Telegraph says:
The separate [national] minimum wage rates for young people are the most likely to be frozen to make it easier for firms to offer jobs to one million under-25s who are out of work.
The national minimum wage rate for workers aged 16-17 inclusive is currently set at £3.68 per hour, while the national minimum wage development rate (paid to workers aged 18 to 20 inclusive) is £4.98 per hour and the apprentice rate is £2.60 per hour. See XpertHR's statutory rates pages for full details of the current national minimum wage rates
(XpertHR subscription required).BIS and CIPD favour freezing national minimum wage rates for younger workers
Both the BIS and the CIPD favour freezing national minimum wage rates for younger workers in 2012/2013.
The Telegraph reports that "in its own evidence to the [Low Pay Commission (LPC)], BIS warned that increases in the minimum wage made employers more reluctant to hire." It quotes the BIS submission as follows:
There are [...] reasons to be cautious and moderate in recommending NMW (National Minimum Wage) rates for young people. Evidence suggests that labour market outcomes of younger workers are more at risk from the uprating of the NMW.
In its submission to the LPC late last year, the CIPD called on the LPC to recommend that national minimum wage rates paid to younger workers be frozen in 2012/2013.
In a Twitter discussion with me and @neilmorrison
on Monday 3 October 2011, the CIPD stated
that it believes that the "national minimum wage is harming youth employment in some sectors," and should therefore be frozen next year (although it notes that this is "a finely balanced decision").
The CIPD also said
(again via Twitter): "we've called for a freeze in past. We support NMW, but with rising unmplyment, temp freeze may be for greater good." The CIPD believes that such a national minimum wage freeze for 2012/2013 should be confined to younger workers
. It says that the "adult rate appears to have less overall impact but there are variations by region & sector. So policy focus wld be on the yth rates."
The CIPD argues
that it would like to see national minimum wage rates for younger workers frozen until the economy recovers: "The freeze could be absolute or relative, but would last until we see more robust growth."
Access the CIPD's full submission to the LPC here