National, ACT barking on youth rates

I’m almost lost for words – this is so unbelievably stupid.  National and ACT want to reintroduce a discriminatory lower minimum wage rate for young people.  And they are not just talking about people under 18 who were subject to youth rates before a Green Party bill abolished them in 2008.  They are talking about extending them to people aged up to 24.

Labour Minister Kate Wilkinson says:

If you’ve got somebody who is 16 who is wanting a job and someone who is 30 at the same price, then who is the employer going to employ?

Fail, on all accounts.  Wilkinson seems to think employers create jobs because they have some spare money floating around.  They don’t.  They create jobs because they expect doing so will expand their business and/or improve its profitability.  Thanks to the Government’s failure to respond to the recession with policies that encourage employers to create jobs, there are simply not enough jobs to go around at the moment.

But Wilkinson would rather see the 30 year old, often with a mortgage and a dependent partner and children, out of work rather than the 16 year old who has the lifestyle flexibility to choose to further train or study to improve his or her chances in the labour market. Unbelievably stupid!

There is absolutely no evidence of a causal relationship between the minimum wage for young people and youth employment rates.  In  fact, a study undertaken by Treasury and the Department of Labour back in 2004 showed that when the youth rate was substantially increased (and in the case of 18 and 19 year old workers set at the adult rate) youth employment rates actually increased.

This isn’t about getting young people into work at all.  It is about an evidence-averse Government prepared to suck up to employer lobbyists’ demands for lower wages.

If there is an up-side to the Government’s barking mad discriminatory policy, I suppose it will encourage more young people to vote, and young people’s votes tend to favour the Greens.

Update: According to Danyl at the Dim Post, Kate Wilkinson’s office has denied that consideration is being given to setting the age for youth rates at 24.


3 thoughts on “National, ACT barking on youth rates

  1. Youth rates were supposed, in (false) theory, to be about giving unskilled young people a start in the workforce. But 24-year-olds could well have NCEA level 3 and six years of work experience, or a doctorate.

  2. 25 is the age at which the Student Loans Act of 1992 allows a student to be asset-tested on their own assets for allowances, not their parents’ assets. The assumption is that students (at whatever level, up to doctorate) are dependent on their parents for living costs until that age.
    This flows through into the ECA of 1992, and ammendments, which also gave youth rates assuming young people living under the parents’ roof, at the parents’ expense.

    Neither of these pieces of legislation seemed to have encountered the real-world situation where young people leave home BECAUSE there is neither work nor training available in their home-town, nor any understanding that unemployed young people are often not still living at home.

    As to the likelihood of your young doctor’s being paid youth rates – so would some of our fresh teacher graduates – this is an area of the public service that costs a lot of money, being able to legally underpay young teachers, doctors, nurses (and let’s go the whole hog) and policemen/women would save the Government a whole lotta taxes, wouldn’t it? Which could of course go back to the shareholders as dividends, I mean to the rich as tax cuts.
    Hmmm? 😉

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