By 3 News online staff and Tova O’Brien
The Government has re-introduced youth wages, meaning companies can legally pay young workers 20 percent less than adult counterparts.
The new ‘start-out wage’ applies to 16 and 17-year-olds in their first six months of work with a new employer and 18 and 19-year-olds entering the workforce after more than six months on a benefit.
It also applies to students between the ages of 16 and 19 who are enrolled in an industry training course.
The policy will see those in these groups paid $10.80 an hour – only 80 percent of the adult minimum wage of $13.50.
Labour Minister Kate Wilkinson says re-introducing youth wages – abolished in 2008 by Helen Clark’s Labour Government – will stimulate employment.
“The new starting-out wage will help some of our youngest and most inexperienced workers get a much-needed foot in the door, in what is currently a tight labour market,” she says.
Figures released by the Government this morning show the number of unemployment beneficiaries increased 0.2 percent last month to a total of 50,390.
The idea of re-introducing youth pay rates was raised by the ACT Party before last year’s election.
Ms Wilkinson says the policy does not apply to people training or supervising other staff.
‘Young people want this’ – Govt
Social Development Minister Paula Bennett says the Government has been talking to young people who say they want the policy to go ahead.
“They're just saying give us a shot, and employers are saying you don't have the experience, you don't have the qualifications you're just too risky,” says Ms Bennett.
And Kim Campbell, CEO of the Employers and Manufacturers Association, argues that young people have less to pay for.
“Remember these people are not raising a family or running a household on this money –nobody expects them to – but it does give them some money to get started on.”
Minimum wage ‘already too low’ – union
But the move has been quickly condemned by one union, who said age shouldn't matter when it comes to work.
“The minimum wage is already too low for anyone to live on, and forcing our young people onto even lower rates will condemn them to poverty,” says Service and Food Workers Union secretary John Ryall.
“There is no evidence that reducing the pay rates for some workers to do the same job creates jobs or gives young workers skills.
“This is simply about providing cheap labour in a country where wages are already too low and low-paid workers of all ages are struggling to survive.”
Youth wages ‘discriminatory, disgraceful’ – Greens
The Green Party co-leader Metiria Turei says National’s youth wage plan is “discriminatory” and is aimed at providing cheaper labour to employers.
“Rather than offering young people a bright future, through skills and training, youth rates are about undercutting all workers’ wages by ripping off young workers,” she says.
Ms Turei argues the new policy is worse than the previous youth rates system.
“The most disgraceful part of National’s attack on young workers is that they are effectively increasing the age limit for what constitutes a ‘youth’,” she says.
“The previous discriminatory policy of youth rates at least stopped at 18.”
Council of Trade Unions youth spokesman James Sleep says cutting the wage potential of young people will not help them get jobs.
“This is going to nothing to get them into work, this is going to send a message that they're worth less than older people.”
Key didn’t think it likely
For a while Prime Minister John Key seemed to agree a youth wage wasn't the answer. In June last year he said the prospect was unlikely.
“I don't think there's a high probability,” he said. “Whether we'd actually bother embarking on that it's far too early to say.”
But in just ten months the Government's gone from probably not bothering, to full steam ahead
The youth wage takes effect in April next year. The Government's business friends like it, and most of the people least likely to support it aren't old enough to vote.