With news that the government is encouraging companies to offer graduates - unable to secure jobs after leaving university - low-paid internships for three months, is it not time to admit that the recession has proven the minimum wage a failure?
Wages for the interns will be based upon the grants and loans that students currently receive. Therefore, at most graduates are being offered £9,310 per year. The minimum wage is at present £5.73 per hour. As Tim Worstall argued in The Guardian, this equates to earnings of just under £12,000 a year for a 40-hour week. Thus, graduates are being offered the chance to work for less than the minimum wage.
The minimum wage hits the poorest and least skilled the hardest. This is because employers cannot afford to offer them work that would otherwise exist. They are therefore condemned to unemployment, unable to benefit from the opportunities of work. This move is an explicit acceptance that the minimum wage fails to respond to a changing economy. However, instead of helping the least skilled, the government is supporting the relatively privileged.