The incentive for hospitality firms to hire younger and inexperienced staff has “gone away” since the minimum wage for under-21s has been going up, the boss of a major UK pub chain has said.
Pub workers have also been more likely to hold on to their jobs amid shrinking opportunities for work.
Simon Emeny, executive chairman of Fuller’s, told the Press Association that Government policy to improve pay is having the “opposite effect” as businesses are hiring fewer workers.
“There has always been an incentive for businesses like ours to employ lots of young people who are raw, inexperienced and untrained,” he said.
“By reducing the differential between the national living wage and the national living wage for 18 to 21-year-olds, that incentive has gone away.
“Not surprisingly, businesses are gravitating towards people with experience, and that’s creating a situation where 15% of our young adult population can’t get work.
“That’s entirely been caused by what the Government has done with the national living wage for young people.”
The national minimum wage increased again in April to £12.71 an hour for those aged 21 and over, and £10.85 for those aged 18-20.
The Government has previously pledged to scrap lower minimum wage rates for under-21s, saying they are “discriminatory” and should be equalised with the national rate.
Mr Emeny said plans to “eradicate the differential completely” will worsen the situation for young people struggling to get work.
The Government says that increasing the minimum wage helps the lowest-paid in society with the cost of living, with 200,000 young workers benefiting from the latest increase.
A spokesman for the Treasury said: “We have the right economic plan – we’re backing hospitality by cutting VAT on family attractions and kids meals this summer, reforming business rates, with a £4.3 billion support package to limit bill rises, capping corporation tax at 25%, extending World Cup opening hours, and taking action on the cost of living to boost the sector.
“Increasing the national minimum wage boosts pay for over 200,000 young workers, and employer NICs (national insurance contributions) are lower when hiring under‑21s.”
Meanwhile, the boss said that for Fuller’s, which has 337 pubs and hotels, staff turnover is at the “lowest it’s ever been” thanks to fewer people leaving.
“So we don’t need to hire as many people as we would at other stages of the cycle,” he told PA.
“It’s clearly, at the moment, an employers’ market when it comes to hiring.”
Keeping staff at the pub chain “happy and motivated” is an important reason for higher retention, but he also said it indicates “in a tightening economy, people are becoming more loyal” to their employer.
The comments come after Fuller’s reported an increase in sales over the past year, driven by higher food and drink sales as well as increased demand for staycations, which is benefiting its hotel estate.
“This year in particular… what we’re seeing is people being a bit careful about flying,” he said, citing concerns including higher prices and uncertainty over travel during the Iran war.
He said that over the first 10 weeks of the new financial year, since April, it has seen “double-digit growth in domestic vacations”, and highlighted locations like the Cotswolds and the New Forest in England.
Fuller’s also revealed people had been booking pubs ahead of time to watch the 2026 Fifa World Cup, with England and Scotland set to play in the tournament.
