New youth pay rates kicking in

01:56, Oct 09 2012
kate wilkinson
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The Government will re-introduce a a youth pay rate which will see 16-to-19-year-olds making a minimum $10.80 per hour.

The new pay rate, to be called the 'starting-out wage', will not be compulsory but 40,000 teens will be eligible.

It will kicks in on April 1 next year and the Government estimates it will create up to 2000 youth jobs in the first two years.

The starting-out wage will be set at 80 per cent of the adult minimum wage, which is currently $13.50 per hour.

It will apply for six months after starting with a new employer. The move was National Party policy ahead of the election last November.

Labour Minister Kate Wilkinson said the new wage was one of a series of steps to help get people into jobs following the global financial crisis.


"The new starting-out wage will create demand for young people by giving employers a real incentive to take them on."

She said it would help young and inexperienced workers to get a foot in the door.

The wage will be available to 16-17-year-olds in their first six months of work with a new employer, 18-19-year-olds entering the work force after six months on a benefit, and 16-19-year-olds in recognised industry training courses involving at least 40 credits.

Those training or supervising others will not be eligible and must be paid at least the adult minimum wage.The previous Labour government abolished the youth minimum wage in 2008.

The new wage will replace the current new entrants minimum wage which applies to 16 and 17-year-olds for up to three months and the training minimum wage which applies employees aged 16 and over who are doing a recognised industry training involving at least 60 credits a year.

The Service and Food Workers Union has rubbished the move saying a lower pay rate will not create jobs or give young people skills.

National secretary John Ryall said the adult minimum wage was already too low.

"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."

Labour leader David Shearer said the new wage would simply drive more young New Zealanders to Australia.

"Under National's watch, 65,158 young Kiwis aged between 18-30 have headed to Australia looking for better jobs and opportunities - 21,733 this year alone. Paying lower wages will just drive more of them offshore."

Green Party co-leader Metiria Turei said the new wage would undercutting all worker and rip-off young workers.

"This policy is an incentive for bad employers to hire and fire young workers and is likely to see real wages for young workers drop significantly.’’Prime Minister John Key was content with New Zealand being second best and a low-wage economy, Shearer said.

Labour would pay employers to take on apprentices, raise the minimum wage and foster innovation through research and development tax breaks, he said.

"We will create wealth through innovation and by supporting our businesses.  We can't sit back and continue to see manufacturing jobs being shed - 40,000 have already been lost over the last four years."

The starting-out wage was part of the Government’s Skilled and Safe workplaces announcement today.

The Government also announced details today of an annual Occupational Outlook report which will show expected future demand for key occupations.

That will help young people decide what to study, Joyce said.

"The Occupational Outlook will provide information on job prospects for around 40 occupations, as well as setting out likely income ranges, and qualifications needed."

Social Development Minister Paula Bennett and Immigration Minister Nathan Guy announced a new Canterbury Skills and Employment Hub to boost recruitment for the Christchurch rebuild.

The hub will enable employers to list vacancies and recruit from Work and Income.

It will also provide access to training programmes and bringing in skilled labour from overseas.

"The Canterbury Skills and Employment Hub will also pilot a new approach to the migrant work visa process between Immigration and Work and Income," Guy said.

New Zealand workers will be given job opportunities first but will save time if an employer needs to apply for work visas for foreign staff.

The hub was expected to open in the middle of next month.

Tertiary Education, Skills and Employment Minister Steven Joyce said the progress report showed government actions had helped ‘‘lift labour productivity, drive sustained economic growth and deliver higher wages and living standards’’.

It is the third of six reports on progress towards the Government’s Business Growth Agenda.

The report looked at government targets in the area including:

* 85% of 18 year olds will have NCEA level 2 by 2017;

* 55% of 25 to 34 year olds with a level 4 qualification or above in 2017;

* Reduce the number of long-term beneficiaries on jobseeker support by 30% to 55,000 by 2017);

* Reduce workplace fatalities and serious injuries by at least 25% by 2020;

* By 2016 85% of skilled migrants will be employed in a job that matches their skills and qualification;

* Maintaining New Zealand's top four ranking in OECD countries with lowest share of people who are unemployed for six months or more.


The Dominion Post