An interesting question

Under the Youth Contract, 160,000 workers aged between 18 and 24 will have half their wages paid for the first six months. The scheme will only pay half the minimum wage – worth £2,275 – to employers who will then make up the difference.

Wouldn\’t just halving the youth minimum wage achieve the same effect?

Discuss.

6 comments on “An interesting question

  1. No, because you wouldn’t get these people out of bed for half of the current minimum wage. Getting them out of bed for the minimum wage is a challenge enough. After all, why should one sacrifice 40 hours a week of leisure for an extra £5 (after you consider the effect of benefit withdrawal, cost of getting to work, etc.)?

  2. Which James just leads to the next logical conclusion – why have any unemployment benefits at all? Except, perhaps and I am by no means sold on the idea, in the extremely short term.

    If the minimum wage is lower, they will all get jobs. If they have no benefits, they will magically acquire the motivation to find a job at a market clearing wage.

    As doing nothing would make the problem go away what possible reason is there to meddle and make things worse? At most we should be doing this and only this – topping up wages to a reasonable level.

  3. Half the current minimum wage? An annual salary of £5,200?

    I’m fairly sure my first wage, at 17, back in the 1980s, was more than that. And that was officially a trainee’s wage – and widely acknowledged not to be excessive.

  4. Lets not forget that one of the reasons these youths ‘won’t get out of bed’ for the minumum wage is that there are plenty of imported workers only too willing to take their place…

    Cutting benefits won’t solve that problem.

  5. As well as JamesV’s point, it would also be, ahem, “politically courageous”. A leftie tweep I follow already described Youth Contracts as “exploitation” until I explained that it was a subsidy to the employer, but the employee still got minimum wage.

  6. This is surely similar to the Future Jobs Fund, which guaranteed 6 months of non-job work to paper over the cracks?

    Lots of ‘third sector’ organisations created jobs with this scheme, but were surprised (!) to find that the jobs couldn’t continue once the slush fund money had run out.

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