A leading Manchester entrepreneur has slammed the Government’s National Living Wage, describing it as discriminatory against under 25s.
The wage increase – which will become law on April 1 – will see those aged 25 and over paid a minimum of £7.20 per hour.
However, workers under 25 who are currently paid less than this amount will see no increase in pay.
Lawrence Jones, CEO of Manchester-based web hosting firm UKFast, claims the Government are not representing young people.
— Lawrence Jones MBE (@Lawrence_Jones) 18 March 2016
“I think it’s absolutely disgraceful,” Lawrence told MM.
“I don’t think it’s any different to race discrimination or sex discrimination, this is age discrimination.
“16 years ago, we were paying more money to 18-20 year olds than the current minimum wage, which is £5.30.
“It shouldn’t be acceptable to discriminate based on someone’s age, it all ties in with the idea of looking at what’s inside each individual person.
“Two people doing the same job should be paid equally, regardless of age.”
According to analysis by polling company, Ipsos MORI, people under 25 were much less likely to vote for the Conservatives than other age groups – and up to 30% less likely to vote at all.
“They are doing a lot of things right but – like cutting disability benefits – this is very, very wrong,” said the 47-year-old, whose company is worth almost a quarter of a billion pounds.
“I’ve got 19-year olds at UKFast who have really developed their skills, to the point where they’re equivalent to or better than more seasoned colleagues.
“I just think the whole idea is preposterous.”
Lawrence was awarded an MBE last year for his services to the UK digital economy and said that he believes that keeping employees happy is the key to success.
Based in south Manchester, the office includes a power nap room, a retro games room, a bar, and even a state of the art recording studio.
Lawrence said that the National Living Wage could also have a negative effect on those over 25.
“It’s going to cause significant problems for a lot of people,” he said.
“The Government have gone under the radar in the hope that everyone is going to go for the £7.20 headline number knowing that they’re not going to get an awful lot of opposition.
— Tech City UK (@TechCityUK) March 26, 2016
“The companies that make the biggest noise will be able to say ‘don’t worry we can still do it for £5.30 per hour for 18-20 year olds or £6.70 per hour for 21-24 year olds’.
“You know company accountants are going to advocate the saving on the wage bill.
“In reality, it’s not a significant change for a lot of people.”
The CEO accused some businesses of not creating long-term business plans.
“Sadly, some people will be profit driven,” he said.
“At the moment, it is too easy to get a calculator out and do quick calculations based on short-term profits.
“What I’ve learned over the years is that people come first and profit comes later.
“What we need is for the Government to lead the way and set an equal minimum wage to stop companies from abusing young people or employees in general.”
Lawrence believes that ultimately, without a change in the attitude of law-makers, it’s down to progressive business owners to influence others.
“I do think that you need forward thinking businessmen,” he said.
“I’m proud to be known as one but there are many others out there.
“I know other businessmen that have seen what we’re doing and followed suit and likewise I’ve been inspired by others.
“We have to prove a point that investing in your environment has a consequential knock-on effect meaning that you retain good people and you retain profits.
— UKFast Salford 10k (@salford10k) March 24, 2016
“People equal profits, there is no two ways about it.”
Lawrence also warned that businesses will lose workers to companies who share his views on wages.
“If we want to make Manchester the number one tech city in the UK and create a genuine Northern Powerhouse then people need to be paid properly and be engaged and happy in their work,” he said.
“It shouldn’t be a huge badge of honour to commit to the Living Wage, an optional higher rate of pay in line with the cost of living, it should be a given.
“I believe that within five to 10 years, every single business in Britain will be following suit.
“They will have to buy into it, if they don’t then they will lose their best staff to businesses like us.”
Image courtesy of UKFast, via YouTube, with thanks.