{"id":44433,"date":"2025-10-27T05:30:01","date_gmt":"2025-10-27T05:30:01","guid":{"rendered":"https:\/\/employmenthero.com\/uk\/?post_type=news&p=44433"},"modified":"2026-02-03T17:05:41","modified_gmt":"2026-02-03T17:05:41","slug":"how-real-living-wage-affects-young-workers","status":"publish","type":"news","link":"https:\/\/employmenthero.com\/uk\/news\/how-real-living-wage-affects-young-workers\/","title":{"rendered":"Fair Pay, Fewer Chances: What the Real Living Wage Means for Young Workers"},"content":{"rendered":"\n
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Breaking into the working world has never been harder for young people \u2013 and if lower minimum wage rates are scrapped, it could get worse.<\/strong><\/p>\n\n\n\n

It\u2019s no secret that Gen Z have had a rough go of it<\/a>. Unemployment is rising, competition for jobs is fierce and ambition is waning.<\/p>\n\n\n\n

As the Budget approaches, measures designed to tackle this malaise couldn\u2019t be more welcome. Yet the Chancellor\u2019s plan to scrap age bands for the minimum wage, a system critics call \u201cdiscriminatory\u201d, may end up deepening the very challenges it aims to solve.<\/p>\n\n\n\n

When Good Intentions Meet Economic Reality<\/h2>\n\n\n\n

According to the Resolution Foundation\u2019s new report<\/a> on young people who aren\u2019t in education, employment or training, removing youth rates would likely worsen their conditions. Alongside urging the government to scrap its plans, it warns that \u201csharp rises would be ill-advised in the current economic environment and risk making it even harder for young people to get a foot into the labour market\u201d as well as triggering \u201cpotential unemployment effects.\u201d<\/p>\n\n\n\n

Youth Roles Under Threat<\/h2>\n\n\n\n

Part of the pressure stems from the April hike in National Insurance Contributions (NICs). Although employers don\u2019t pay NICs on staff aged 16\u201321, higher costs elsewhere, combined with increases to the 16\u201317 and 18\u201320 minimum wage rates, have led to hiring freezes in industries that traditionally employ large numbers of young workers.<\/p>\n\n\n\n

Recent figures from 91±¬ΑΟ<\/a> show that employment in hospitality \u2013 a sector where around half of the workforce is under 25 \u2013 rose 4.1 per cent month-on-month in September. But that momentum may be short-lived if more cost-raising measures follow.<\/p>\n\n\n\n

The Real Living Wage Effect<\/h2>\n\n\n\n

For younger workers, the real danger isn\u2019t just stagnating pay \u2013 it\u2019s being priced out of the labour market altogether. The Resolution Foundation\u2019s latest analysis of the Living Wage Foundation\u2019s Real Living Wage Rates<\/a> shows rising living costs are feeding into higher wage benchmarks, with the Real Living Wage now set at \u00a313.45 across the UK and \u00a314.80 in London. Essentials like food, gas and water have climbed far faster than overall inflation \u2013 up 5, 13 and 26 per cent respectively \u2013 pushing pressure onto employers already stretched by higher operating costs. While these voluntary rates reflect what\u2019s needed for a basic standard of living, sharp increases in wage floors without targeted support could narrow opportunities for those at the start of their careers.<\/p>\n\n\n\n

That risk extends beyond pay packets. When entry-level jobs become too expensive to offer, internships and apprenticeships \u2013 the very roles that give young people vital first-hand experience \u2013 are often the first to go. Youth employment programmes, local training schemes and incentives for firms that hire under-25s could help offset the impact, but only if they\u2019re sustained beyond headline announcements. The labour market may be tightening, yet the longer young people are kept out of work, the harder it becomes for them to get back in \u2013 and for employers to fill future skills gaps.<\/p>\n\n\n\n

Balancing Pay, Productivity and Opportunity<\/h2>\n\n\n\n

While higher labour costs make hiring decisions tougher, maintaining clear pathways into work for young people is crucial to a healthy labour market. Employers who keep entry-level roles, apprenticeships and training schemes open are effectively investing in their own future workforce. A balanced approach \u2013 one that links pay growth to productivity and supports skill development \u2013 can help firms manage costs while still building the talent they need to stay competitive.<\/p>\n\n\n\n

As November\u2019s Budget looms, policymakers face a delicate balance: raising pay to meet real living costs without pricing young people out of the jobs market. How the Chancellor squares that circle will determine whether the next generation sees progress \u2013 or another step backwards.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

As the Real Living Wage rises, experts warn it could limit youth job opportunities. Learn how pay reforms may affect young workers, employers and the Budget.<\/p>\n","protected":false},"author":454,"featured_media":44435,"template":"","meta":{"inline_featured_image":false,"exclude_from_algolia":false,"author_id":70413,"reading_time":"3 min read","display_reading_time":false},"categories":[277],"tags":[],"post_features":[],"class_list":["post-44433","news","type-news","status-publish","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/news\/44433","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/types\/news"}],"author":[{"embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/users\/454"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/media\/44435"}],"wp:attachment":[{"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/media?parent=44433"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/categories?post=44433"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/tags?post=44433"},{"taxonomy":"post_features","embeddable":true,"href":"https:\/\/employmenthero.com\/uk\/wp-json\/wp\/v2\/post_features?post=44433"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}