PM on Youth Wages
August 17th, 2011 at 12:00 pm by David FarrarDana Leavy at Stuff reports:
Prime Minister John Key says the Government will decide whether it will reintroduce the youth minimum wage before the election, but says it is unlikely.
This is disappointing. I have no doubt that a $13/hr minimum wage has priced unskilled 16 and 17 year olds out of the market. The three solutions are:
- Lower the minimum wage for everyone
- Have a separate lower minimum wage for 16 and 17 year olds, say at 80% of the adult minimum wage as it used to be
- Have the minimum wage law apply only at age 18, instead of age 16
Option 3 would be my preference. This would be the greatest boost to youth employment, and ensure that 16 and 17 year olds are able to get jobs.
However, Key said today the Government needed to look at all the factors that might work.
“We will consider it,” he told TV3′s Firstline programme. “I wouldn’t say we would necessarily carry it out.”
There was already a training wage which covered the first 200 hours, Key said. While a youth minimum was a factor, the Government didn’t want the public to believe it was the only factor.
“Because I think if it’s the only factor someone’s getting employed on, we’re probably getting off on the wrong track here.”
It is not the only factor, but it is a factor.
Related posts:
- The cost of no youth minimum wage
- Australian youth rates
- Key on youth minimum wage
- NZ minimum wage higher than UK
August 17th, 2011 at 1:40 pm
“We will consider it,” he told TV3′s Firstline programme. “I wouldn’t say we would necessarily carry it out.”
Don’t forget we’re talking about John “Kiss-Ass” Key here. What he’s really saying is: “We’ll calculate how many average economically illiterate mum and dad voters we’ll lose to Labour if we introduced a youth minimum wage, then disregard the idea.” Zero percent of the consideration will actually be on the effect it will have on employment.
Vote:August 17th, 2011 at 2:13 pm
John Key needs to get real. He was elected to lead, not follow. There’s no doubt that the abolitiion of Youth Wages has cast thousands of young people onto welfare and hopelessness.
John Key’s refusal to raise the retirement age is another blot in his copy book. No one who has studied the issue believes that the current retirement age is sustainable or wise.
I don’t think that John Key realises how demoralising this style of “leadership” is for all those who think deeply about the issues and the future of the country.
Come on – put it in the manifesto and let’s have an election about the real issues and the future of the country.
Vote:August 17th, 2011 at 2:16 pm
one thing i noticed, kids don’t seem to deliver newspapers anymore. At least in my area.
I wonder if this is related to the minimum wage.
Vote:August 17th, 2011 at 2:21 pm
@freedom101 2:13 pm
Where’s your evidence for that? Or did you just pull it out of your arse? When 18,19 year olds were moved to the adult minimum wage from 2001 and the 16,17 year old rate substantially increased, youth employment rates actually improved.
Which would tend to indicate the current blow-out in youth employment is due to factors other than the abolition of youth rates for 16 & 17 year olds.
[DPF: Toad, I've said this dozens of times. Increases in minimum wages only affect employment when they hit a certain level, usually around 45% of the median wage. In other words increasing from $5 to $6 an hour will have little impact but from say $13 to $16 a huge impact]
Vote:August 17th, 2011 at 2:24 pm
Oops, that link doesn’t appear to be opening. Try this one.
Vote:August 17th, 2011 at 2:39 pm
Lets be a little bit real, its 3 months from the election , dont expect anything from any politician other than attempted vote winning sound bites .
Key has left himself wiggle room to move whichever way gets him votes and I do not blame him one bit.
We need a 4 year term.
Vote:August 17th, 2011 at 2:42 pm
Toad you link disproves your case as usual in 2007 we were still in a growth stage your paper states that there is a substitution value associated with youth employment eg if you have a greater pool of adults to employ there will be less youths employed I will guarantee that a revisit of this study since the problems over the last 4 years will show up this even more
Vote:August 17th, 2011 at 2:42 pm
“We need a 4 year term”
Totally agree.
Vote:August 17th, 2011 at 2:54 pm
Option 4) (in light of the recent IYB proposals) Subsidise employers who take on people under the age of 18. Such as by not paying PAYE on their wages. Consider it a training grant if you will.
Vote:August 17th, 2011 at 3:22 pm
No, no, no four year term!!! The three year term is a restraint on power, probably one of the few that we have.
Vote:August 17th, 2011 at 3:34 pm
@labrator: Such as by not paying PAYE on their wages. Consider it a training grant if you will.
Ah, the Unite model, good thinking
Vote:August 17th, 2011 at 3:44 pm
A four year term without an Upper House or a proper constitution…..no way, no how!
Vote:August 17th, 2011 at 4:05 pm
@hmmokrightitis Indeed! I wonder if they will use that in their defence, or will they just claim limited liability…
Vote:August 17th, 2011 at 4:46 pm
Toad – I think it was Al Gore in his movie An Inconvenient Truth who observed that it’s very hard to explain something to someone when their livelihood depends upon their not understanding it. The same would appear to apply to you over youth rates. No matter how clearly it’s spelt out it will remain an inconvenient truth to you, and you will not understand it.
Vote:August 17th, 2011 at 5:03 pm
Why not a training wage system – 1/2 a minimum wage of $15 an hour. Some people would rather work for $7.50 an hour and learn on the job than take out a student loan and live on a student allowance.
Vote:August 17th, 2011 at 5:11 pm
How many more young people will be out of work if Labour get in and increase the minimum wage to $15 an hour. The massive increase in youth unemployment started when the youth rate was dropped. Look at the stats Toad.
Vote:August 17th, 2011 at 5:15 pm
The stats also say electing National was bad for the budget and the economy, but without placing that in context with other things people might jump to conclusions on that also …
Vote:August 17th, 2011 at 5:24 pm
“A four year term without an Upper House or a proper constitution…..no way, no how!”
Or Voter’s Veto
Vote:August 17th, 2011 at 6:06 pm
Chuck Bird
…..”Or Voter’s Veto”….
Could you enlarge on this?
Vote:August 17th, 2011 at 7:35 pm
Voter’s Veto is done in Switzerland. It is a little similar to a binding referendum but there is not the problem with wording. They need 50,000 signature to initiate a referendum to veto legislation before it becomes law. There is no way the anti smacking legislation could have become law under such a system.
Vote:August 17th, 2011 at 9:25 pm
Chuck Bird
I’ll do a little research…thanks.
Vote:August 18th, 2011 at 9:02 am
The minimum wage could be abolished or reduced for all (lose the discrimination aspect of youth wages) over the 90 day (or preferably 180 day) period.
And there should be 4 year terms. We spend too much time electioneering and not enough time governing, and the results that become apparent before our elections are often those caused by the previous term, and policies enacted in the current term don’t have enough time to settle in.
Vote:August 18th, 2011 at 10:25 am
Toad is right to point to the Hyslop and Stillman piece, which is an excellent piece of work. The only problem with it is that the period of analysis saw one of the biggest employment boosts in recent times. Adult unemployment hit record lows; anybody who could fog a mirror could get a job. Once the labour market stopped being so damned overheated, outcomes started varying.
Vote:August 18th, 2011 at 11:32 am
Youth rates are a pathway for young people to productive prosperity. Removal of them is a roadblock.
Vote:August 18th, 2011 at 7:23 pm
When Treasury assess the job loss from a $15 an hour wage as about 5000 jobs, linking the job loss from this recession to the end of youth rates looks like the political spin that it is.
A 15% an hour minimum wage is the greater good for the greater number that is the bread and butter of democratic politics. Parties that ignore it will shorten their time in government, unless they think people will accept continual decline in wage relativity with Australia.
That said youth training and or employment is always a concern and training wage/apprenticeship systems (say at half $15 – $7.50 an hour) are a good way for both the taxpayer and employers to do each other a favour (though while more youth would take it up it should also be available to older workers). Where people prefer this option to tertiary loan and student allowance this should be an option.
Vote: