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The Labour Party government has been urged to rethink scrapping minimum wage youth rates. A t hinktank fears 16-year-olds to 24-year-olds not in education, employment or training could be "priced out" of entry-level jobs after the Labour Party rule change. The government is being urged to consider breaking a manifesto pledge to scrap youth rates of the minimum wage. The warning comes amid a dramatic rise in the number of young people out of work and education. The Resolution Foundation warned the number of young people classified as Neet had risen by 195,000 over the past two years to reach 940,000 and the figure was poised to hit 1 million for the first time since 2012. READ MORE 1.6 million drivers handed £160 fine 'after wanting to follow rules' Labour promised before last year’s general election to scrap “discriminatory” lower minimum wage rates for under-21s, so that all adults would be entitled to the same legal pay floor. Labour is taking a phased approach, with a bumper rise in the legal pay floor for 18-year-olds to 20-year-olds. The rate for 18-year-olds to 20-year-olds was increased by 16.3 per cent in April this year to reach £10 an hour, above the 6.7 per cent rise for those aged 21 and over, which now stands at £12.21 an hour. “Any increases in the rates would need to be especially cautiously considered in the current economic environment to prevent young people from being priced out of entry into the labour market,” it said. Louise Murphy, a senior economist at the Resolution Foundation, said the government needed to “redouble efforts” to reduce the number of Neets by making it easier for them to return to education, or to get their first experience of work. “Otherwise, we a risk a cohort of young people slipping through the cracks into a lifetime of lower living standards,” she said. A government spokesperson said: “By strengthening the national living and minimum wage for 3 million workers across all age bands, we aim to support business growth though reduced staff turnover and by helping to achieve higher productivity.”
