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UK Youth Jobs Hit by Minimum Wage Hikes
15 Feb
Summary
- Youth unemployment rose to 13.7% in the three months to November.
- Minimum wage for 21-22 year olds increased by 33% over three years.
- Policymaker links youth job losses directly to wage increases.
Youth unemployment in Britain has seen a significant increase, reaching 13.7% for 18-24 year olds in the three months leading up to November. This figure marks a rise from 10.2% three years prior, reaching its highest point since late 2020.
Bank of England policymaker Catherine Mann has indicated that significant hikes in minimum wages for younger workers are a key factor behind this trend. She specifically pointed to the 33% increase in the National Living Wage for 21-22 year olds, bringing it to 12.71 pounds per hour. Additionally, the rate for 18-20 year olds rose by 46% to 10 pounds per hour.
Mann cautioned against viewing this rise in youth unemployment as a precursor to a wider labor market deterioration. She stated that the cumulative effect of wage increases for this demographic over the past three years has unfortunately manifested as job losses within that specific category of workers.
This situation contrasts with the overall workforce unemployment rate, which increased to 5.1% from 3.9% over the same three-year period. The UK government has expressed an intention to align the minimum wage for 18-20 year olds with that of older workers.
