The national minimum wage for 16 to 20 year olds will be frozen next year to stimulate job creation for young people as the adult rate rises 1.8%.
British Retail Consortium has welcomed the adult rate increase of 11p to £6.19 an hour from October.
BRC director general Stephen Robertson said: “The Government’s made a thoroughly wise decision.
“This sensible increase shows appropriate restraint at a time of falling inflation and rising unemployment. 1.8% is within the limits the BRC’s evidence showed would allow retailers to create and maintain jobs. Any larger increase would have piled extra pressure on retailers at a time of weak customer demand.
The government has accepted the Low Pay Commission’s (LPC) recommendations, which strike “the right balance between pay and jobs”, according to business secretary Vince Cable.
Cable said: “In these tough times freezing the youth rates has been a very hard decision – but raising the youth rates would have been of little value to young people if it meant it was harder for them to get a job in the long run.”
The minimum wage for 18- to 20-year-olds will remain at £4.98 an hour, and at £3.68 for 16- and 17-year-olds.
Robertson added: “As the largest private sector employer, retail recognises its vital role in providing much needed employment. Over 98% of people working for our members are paid more than the minimum wage but this is the right move in the current economic conditions.
“Freezing the youth rate may make a marginal difference to work opportunities for young people but retailers pay the rate for the job and the vast majority of under 20s working in retail are paid the adult rate.”