Young people forced into debt due to low wage rates
A total of 84% of those surveyed said they occasionally or regularly have to limit their social life as a result of their wages, with more than 92% of respondents contributing to housing costs.
In July last year, Keir Starmer's Labour government committed to removing "discriminatory age bands for adults".
However, the UK's Minimum Wage (the 'National Living Wage') laws still allow workers to be paid less based on their age, even if their job, skills, and experience match those of colleagues.
While the minimum wage for workers over 21 is £12.21, it is £10 for workers aged 18-20 and £7.55 for workers aged 16 and 17.
There are currently 30,000 employees aged 16-17 and 280,000 employees aged 18-24 in Scotland. 3
The report states that these workers are disproportionately likely to be on low pay as more than a third of employees (36.2%) aged 18-24 in Scotland were paid less than the real Living Wage in 2024, compared to less than 1 in 10 in all other age groups.
Those aged 18-20 currently earn less than 82% of the national minimum wage, while 16–17-year-olds currently earn less than 62% of the national minimum wage.
In April this year, the minimum wage for over 21s rose by 6.7% from £11.44 to £12.21.
The minimum rate for apprentices and workers under 18 also went up by 18% from £6.40 to £7.55. For 18–20-year-olds the rate went up 16.2% from £8.60 to £10.
The report argues that whilst this marks progress, these rates are 'clearly still short of the rates for older workers'.
READ MORE:
National living wage likely to rise to £12.71 next year, advisory body estimates
Government asks body to consult on axing 'discriminatory' minimum wage age bands
Scottish Government urged to introduce minimum income
The Prime Minister promised to abolish youth wage rates during last year's general election campaign, however, the UK Government has not yet put a date on when these age bands will be removed.
STUC General Secretary Roz Foyer has said Keir Starmer must keep his promise so that he does not 'betray' young workers.
Ms Foyer: 'Our report highlights the impact of the abundantly discriminatory rates of pay for young workers. Working alongside colleagues doing the exact same job should result in the exact same pay.
'Age should not define your worth or wage. With 66% of respondents saying they're in eye watering debt – some as much as £10,000 – resultant from poor pay, it's clear that discriminatory wage rates are trapping young people into poverty.
'Our message to the Prime Minister is clear: do not betray our young people. During the election, the Labour UK Government made the pledge to abolish youth rates of pay.
"It's high time they paid up for young people and gave them a proper pay rise worthy of their work.'
Testimony submitted to the STUC outlined the experience of young workers working full-time for less pay when compared to other colleagues doing the same role.
One respondent stated: 'I regularly worked 40-45 hours per week… and did not pursue further education opportunities as I could not afford to do so. It was very frustrating to be paid less that my colleagues when I was under 21 as I was doing the same work as them, worse hours, and with no additional responsibilities'
The UK Government has asked the Low Pay Commission to recommend rates to 'narrow the gap with the National Living Wage… while also taking into account the effects on employment of younger workers, incentives for them to remain in training or education and the wider economy'
The UK's youth rates are low in comparison to other countries across the world.
In Germany, Spain, France and New Zealand, the rate for 18- to 20- year-olds is the same as the adult rate.
The report concludes: "It is time that the UK follow the example of Spain, France and Germany and have one rate of pay for all workers."
The UK Government has said the new remit for the Low Pay Commission (LPC) to remove age wage bands "will drive forward the Government's commitment to delivering a single adult pay band."
The commission has it will consult with employers, trade unions and workers to "narrow the gap" between the 18–20-year-old rate of the National Minimum Wage and the National Living Wage and "will put forward recommendations on achieving a single adult rate in the years ahead".
Recommendations are made by the LPC each October – for minimum wage rates to apply from the following April.
A UK Government spokesperson said: "We are on the side of working people who should be paid fairly for what they do, and this Government has already given a pay rise to 220,000 of the lowest paid workers in Scotland.
"We are taking action to end discriminatory age bands when setting the minimum wage, and we aim to continue our progress towards a single wage rate for adults, without negatively impacting younger workers.'
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