Are age based pay rates harmful to the hospitality and retail industries?

According to a recent article, Adam Rowledge reminded us that McDonalds have announced an increase in pay for their younger employees and he backed the active promotion of 'doing right' by their staff. If people are to be at the heart of business, should you be paying staff of different ages, differing wages? Zero-hour contracts and unpaid internships plague the young person's job market, with the chronic housing shortage forcing many into inadequate accommodation. Businesses want to be seen to provide a rewarding environment for all, and to be inclusive of all demographics. Would this happen if all age groups received equal pay?

He points out that there are legal minimum wages for different age groups and some age groups are unable to perform certain tasks for legal and safety reasons. For those who can perform all duties, should there be any difference for those doing the same job and is equal pay the next step? Training and developing young people within the culture of your workplace and offering opportunity is incredibly rewarding and this may counter the argument. 

Equal pay would mean businesses are less incentivised to employ young and inexperienced staff. Why would they take on a 16-year-old team member who has no experience, when they cost the same as a 25-year-old who has nine years of experience in the workplace. Admittedly, some 25-year olds may have no work experience, and we are all aware that during recruitment, there should be no age discrimination. The most appropriate person should be placed in a role when reviewing candidates. It is obvious however, that businesses will rely on these lower earners, to run a profitable service.

According to the Low Pay Commission, the government’s advisory body on the minimum wage, justifies the system by claiming that it “protect[s] employment”. “Young workers are more at risk of being priced out of jobs than older workers”, the LPC argues, so the ability of young people to work for less than the living wage helps them into employment.

Hospitality needs to attract a young workforce to the industry in the first place and paying well is half the battle. Some catering contractors are now obliged to pay National Living Wage, not minimum wage, as part of their bid for work. With such instability, it is no wonder that a quarter of young people aged 18–30 lack the wages to move out of their parents’ home. 

According to a Deloitte Millennial Survey, the most important factor for millennials entering work, is the financial reward. Generation Z, place financial reward second after positive working environment. 

There is a strong case to provide equal pay for equal work across the board, however in uncertain times, businesses are likely to tighten purse strings and avoid sweeping pay rises without legislation to impose them.