Companies, particularly smaller firms, could be reluctant to create jobs by recruiting inexperienced staff because they are put off by an increased wage bill, the Low Pay Commission has claimed.
New rates for the minimum wage took effect on Saturday. For 18- to 20-year-olds, the minimum wage is now £4.98, up from £4.92. For 16- to 17-year-olds, the new rate is £3.68, up from £3.64.
In its official advice to the government on this year’s pay rates, the Commission raised concerns about younger workers, the first such warning since the introduction of the legal minimum rate in 1999.
And the British Chamber of Commerce (BCC) said that attempts to tackle the minimum wage should be part of the effort to reinvigorate the economy. Adam Marshall, director of policy at the BCC said there should be a freeze in the minimum wage for younger workers, followed by a consultation with employers about a gradual reduction in the rate.
He said: “The concern is that the current rate is discouraging some employees from taking on young people and giving them a chance to get into the workplace. Some companies are finding the rate is a real problem.”