National Minimum Wage

Chapter 3
Young People, Interns and
Apprentices
Introduction
3.1 As part of our remit, the Government has again asked us to review the labour market position
of young people, including those undertaking an apprenticeship or internship, and the levels
of each of the different minimum wage rates. This chapter focuses on young people, interns
and apprentices. Our recommendations for the youth and apprentice rates are covered in
Chapter 5. In recommending minimum wage rates for both young people and apprentices,
we have sought to ensure that the rates neither provide an incentive for young people to
leave education or training, nor restrict the opportunities available for those who want to
enter the labour market or begin an apprenticeship.
3.2 This chapter begins by looking at the earnings and labour market position of young people,
and how they have fared in the period since the recession of 2008-2009. This is followed by
a brief section on interns. An internship is a form of work experience, often unpaid, that is
designed to help a young person get started in the labour market. The sustained growth in
the number of unpaid internships, and the volume of evidence submitted to us by
stakeholders, suggests there may be an issue with minimum wage compliance for interns
(this is covered in detail in Chapter 4). Finally, we look at apprenticeships, and assess the
impact of the introduction of the Apprentice Rate from 1 October 2010.
Young People
3.3 We showed in the 2011 Report that employment prospects for young people have been
deteriorating over a number of years. This decline accelerated in the recession, with greater
falls in employment rates, and greater rises in unemployment rates for young people
compared with older workers. Earnings data also showed that employers were making
increased use of youth rates of the National Minimum Wage (NMW), and that more young
people than ever were falling within the coverage of the minimum wage. We concluded that
there were good reasons to take a more cautious approach when recommending the youth
rates. However, we added that we would keep the position of young people under careful
review.
3.4 This section looks at the latest research, data and stakeholder evidence on young people.
We consider the youth rates of the NMW, and the earnings and labour market position of
young people to assess if the minimum wage has had an effect. We also look at those young
people not in education, employment or training (NEET), and see if this proportion has
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