THE MINIMUM wage is one of those issues where a bit of common sense goes a long way, if only it is allowed. Sadly, the voice of reason has not often been welcome in this debate. All praise, then, to the boffins at the Organisation for Economic Co-operation and Development for their assessment of the evidence in member countries. If the debate had not become so heated, the conclusions would be no surprise: a minimum wage is no cure-all for poverty, but does not destroy vast swathes of jobs either. Where it does hit job prospects, it is for young people at the start of their working life.
Luckily for the Government, the Low Pay Commission recommended an adult rate not high enough to frighten employers. Most of the outcry, therefore, has come from unions and anti-poverty campaigners. And they are particularly angry about the cut in the proposed youth rate from pounds 3.20 to pounds 3.00 an hour. Both are miserly wages, so the anger is understandable. But it is misplaced.
The reason is that most young workers - more than four-fifths - live in households that are not poor. Typically they rely on parental support just as much as their contemporaries in higher education. If they are not at college or in full-time training, what they need above all else to make sure they have decent prospects in life is a job. Even a job with low pay and bad conditions is better than unemployment for somebody starting out, because if they do not develop the disciplines and social skills of work and fail to get on the first rung of the ladder, they are unlikely ever to prosper.
It is therefore right to start out with a very cautious level of the minimum wage for the youngest groups - including all of those eligible for the New Deal. What the protesters ought to be focusing their energies on is how to assess its effect, or lack of it, on jobs, and consequently how it can be uprated over time. It is a real disservice to younger workers to posture about how their minimum wage level has been set too low, for the evidence is that in so far as a minimum wage hits jobs at all, it is the prospects of the young that get hurt most.Reuse content