Should young workers be paid less? Examining the minimum wage debate

Around the start of November, Nigel Farage, a member of the British Parliament and leader of Reform UK, stated that his group could cut the minimum wage for young people and, as reported by Sky News, said that there “is an argument” that current rates are “too high”. As someone with a part-time job, I am strongly opposed to my wage being lowered; however, it is worth examining why Farage suggested it, and I will explore the topic further in this article. 

Farage was sure to say that his group would lower the minimum wage, but it is rare for the rate to go down. Keeping the minimum wage constant over time technically lowers wages due to inflation, and lowering it further seems infeasible. Combining his earnings from being a member of Parliament, a public speaker, a brand ambassador, and from various other job roles, Farage is among the top 1% of earners in the United Kingdom, which makes his statement feel just slightly out of touch. 

Why should younger people be paid less than older ones for the same job?

Although he suggests lowering the minimum wage for younger people, the idea does not seem particularly substantial, as the Low Pay Commission recommends the opposite. Published on 26 November 2025, the Low Pay Commission announced recommended minimum wage rates for the following year. The recommended rates for 16-17-year-olds would be £8.00, for 18-20-year-olds £10.85, and for 21 and over £12.71, which would average to a 6.2% increase based on current National Minimum Wage rates. According to the Bank of England’s inflation calculator, the inflation rate has been roughly 3.0% from January to October 2025. The rates recommended by the Low Pay Commission are therefore higher than necessary if they follow the inflation trend. 

The commission provided more reasoning for choosing this specific amount for the recommended National Minimum Wage in their advice letter, stating that “Workers and Unions feel that National Living Wage increases have been insufficient to mitigate higher living costs”. This assertion extends to both sides of the argument for lowering wage rates – as a fellow University Student put it, “It increases incentive for companies to employ younger people, but at the same time, why should younger people be paid less than older ones for the same job?” 

Both directions of adjusting the minimum wage have been argued, and each has its pros and cons. As the student said, lowering the minimum wage does encourage companies to hire younger employees, as the cost of labour would decrease. If the minimum wage for all ages is the same, and there are two contenders for a job role, with one being 17 and the other being 25, respectively, the employer would oftentimes go for the one who is likely to have more experience, be a long-term employee, and be more responsible. On the other hand, why should younger people earn less for doing the same jobs as older employees? There is the argument that older employees are more experienced. However, it is not always the case, and a younger employee might be more experienced in the role and still be paid less than an older employee with no prior experience. 

Farage says the argument for reducing minimum wages for younger workers is that “we have lowered the level at which NIC (employers’ national insurance) is paid to £5,000 a year.” In other words, employers in the UK now have to pay more towards NICs, and the earning threshold has decreased significantly (from £9,100 to £5,000 a year). Deloitte’s view on this is, “Some employers are likely to react to the increase in the cost of employing staff by offering lower pay increases in future years. However, employers in low-wage sectors have less scope to defray the increased costs of employment in this way, especially if a large part of their employee population is paid at National Minimum Wage rates, where annual wage increases are statutory.” 

Farage also expressed the view that the Chancellor, Rachel Reeves, should “do one or the other – either lift the cap at which NI (national insurance) is due, or lower the minimum wage for younger workers”. In light of Deloitte’s statement, we can understand why he suggested the two solutions. “Lifting the cap at which NI is due” refers to the NIC, and essentially is undoing the pressure on businesses to lower employee wages (but would mean that the chancellor has to backtrack the previous decision made) – while lowering the minimum wage for younger workers means that employers that pay in the low-wage sector have more wiggle room for balancing out the cost again. 

Rachel Reeves announced £820m in funding for guaranteed work placements for 18-21-year-olds who have been NEETs for over 18 months.  

While the solutions seem straightforward, lowering the minimum wage would not sit well with the younger workforce. Not every family is financially well-off, and a young employee might be the sole earner. Putting further financial burden on an already struggling person is quite horrible – and Farage, stating his view on the new NIC policy, appears very detached from the regular working class.

Regarding increasing youth employment, the Home Office Treasury had published guidance for salary sacrifice for pensions, stating that “From April 2029, the amount that is exempt from National Insurance contributions (NICs) will be capped at £2,000 a year for employee contributions made via salary sacrifice” and had defined salary sacrifice as “when you agree to reduce your gross salary or sacrifice a bonus and, in return, your employer pays the same amount into your pension”. 

NIC exceptions apply to businesses hiring under-21-year-olds, so it would be an incentive for businesses to start looking into the younger workforce group. It would also potentially reduce the number of NEETs – defined as younger people who are no longer in education, but are neither working nor being trained for work. 

Recently, the BBC reported that Rachel Reeves announced £820m in funding for guaranteed work placements for 18-21-year-olds who have been NEETs for over 18 months. It is a good idea in that it will increase employability for NEETs. As an incentive to participate in the work placement, the chancellor announced that benefits would be stripped if they chose not to participate. This scheme would be a good step towards increasing employment rates, but ultimately, its effectiveness depends on how well it is executed. Wales and Scotland, with their Young Person’s Guarantee and Developing the Young Workforce Scheme, have introduced them for a few years, and could serve as a reference point for the government’s execution of this new scheme. 

In conclusion, Farage’s statement has notable points, but it is ultimately flawed. There are better ways to encourage youth employability than reducing the minimum wage. His claim is not entirely supported by fact, and we can provide many other solutions.