National Minimum Wage

Figure 3.6: Economic Activity of 18-20 Year Olds, UK, 1993-2011
Number of 18-20 year olds (thousands)
1,200
1,000
800
600
400
200
0
1993 Q1
FTE and not employed
Introduction of
the NMW
1999 Q2
FTE and employed
2004 Q4
Quarter
Chapter 3: Young People, Interns and Apprentices
Start of
recession
2008 Q1
2011 Q3
1,200
1,000
Employed only Unemployed Inactive
Source: LPC estimates based on LFS Microdata, quarterly, four-quarter moving average, UK, Q2 1992-Q3 2011.
3.26 This trend for an increasing proportion of young people to remain in FTE is likely to be further
strengthened over the next few years, as a result of new government policy. In December,
the Government published ‘Building Engagement, Building Futures’ for England (Department
for Education, 2011), which set out its strategy to maximise the participation of 16-24 year
olds in education, training and work. As part of this, the education participation age in England
will be gradually increased so that by 2015, young people will be required to participate in
learning until their 18th birthday or until they achieve a full Level 3 qualification (the equivalent
of two A-levels).
3.27 Young people will be able to participate in learning in a number of ways, including remaining
in FTE (including school, college or home education), undertaking work-based learning or an
apprenticeship, or working full-time for at least 20 hours a week, while taking the equivalent
of 1 day a week of accredited training. We may therefore expect to see a reduction in the
number of young people in England who are unemployed or inactive after this policy is
phased in from 2013, with a corresponding increase in the numbers in employment or FTE.
3.28 The raising of the participation age in England could affect the character of the youth labour
market, as all 16-17 year olds will be required to be in some form of education or training.
It will be important to develop this policy, and policy in relation to apprenticeships, in a way
which sits comfortably with any future structure of the NMW.
3.29 At present 16-17 year old workers are entitled either to the 16-17 Year Old Rate, or if they are
apprentices, to the Apprentice Rate. We have received evidence that in practice the
appropriate rate is not always paid, but little evidence that that there is an operational
difficulty in principle over the co-existence of the Apprentice Rate and age-related rates.
800
600
400
200
0
81