Bank of England policymaker Catherine Mann told the Sunday Telegraph that a concentrated rise in minimum pay for younger workers over the past three years has contributed to higher unemployment in that cohort.
Mann pointed to data showing the unemployment rate for 18-24 year olds stood at 13.7% in the three months to November, up from 10.2% three years earlier and at its highest level since the fourth quarter of 2020. Over the same period, unemployment across the entire workforce increased to 5.1% from 3.9%.
In the interview, Mann argued the pattern in youth joblessness reflected what she described as "disproportionately big increases in the minimum wage for that age group," rather than serving as a clear early warning of a more widespread deterioration in labour-market conditions. "I think we have to be very careful in the storyline about youth unemployment being the canary in the coal mine for a deeper deterioration in the labour market," she said.
Expanding on that point, Mann said: "The accumulation over three years of the rise in the National Living Wage for that group has been manifested in unemployment for that category of workers. Very unfortunate, but it is true. It is a fact."
The government has raised the minimum wage rates for younger workers markedly in recent years. The rate for 21-22 year-old workers has increased by 33% over the past three years, bringing it in line with the hourly National Living Wage of 12.71 pounds paid to older workers. For 18-20 year olds, the rate has climbed 46% to 10 pounds an hour. The government has stated it intends to bring the minimum wage paid to 18-20 year-old workers in line with that of older workers as well.
Mann, a former chief economist at the Paris-based Organisation for Economic Co-operation and Development, has also taken a cautious stance on recent monetary policy changes. She voted against the Bank of England's last three rate cuts, citing concerns about inflation.
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