Trial period working well

BRIAN DAWSON | CHAMBER TALK
Last updated 09:56 26/11/2012

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‘The proof of the pudding is in the eating."

I often hear this or variations of it. It tells me that while something might look good or bad, it isn't until we experience something that we truly understand how it is.

It is certainly true for the 90-day trial period available to businesses and employees. The arguments upon introduction of the legislation were as expected, with business being strongly in favour, and unions and other employee advocates strongly against it.

We have seen enough to be confident that, on balance, the legislation is working.

A recent Department of Labour survey of employers noted that in more than 80 per cent of all cases where employers and employees agreed to a 90-day trial period, the employment became permanent.

Of the employers surveyed, 40 per cent said they would not have employed that staff member had the 90-day trial period not been available.

The ability for employers to "take a risk" on someone has been invaluable. In most instances, the staff member has worked out well and been kept on and the staff member has been happy to stay.

The net result has been the creation of thousands of jobs and, especially important, jobs for people who might have otherwise really struggled to get work.

There will be people who will continue to advocate against the 90-day trial period because of a bad experience with it or because of an inherent distrust of employers. The evidence so far, however, is that it has created many more jobs and helped those at the margins of society.

The recent unemployment statistics only reinforce the need to retain this successful legislation.

Youth rates

At last we have seen the reintroduction of youth wage rates. With unemployment at 7.3 per cent, the Government must take practical steps to help people in to work, particularly our youth.

A universal minimum wage rate has discriminated directly against young people. Sixteen and 17-year-olds have been competing against more mature workers for jobs and have lost out because employers will take people with skills and life experience over young people who have never worked before.

At the same time, the Government has been saying to young people that unless they can instantly produce enough output in the workplace to meet the cost of the adult minimum wage and all the other costs of employing them, there is no place for them in the workforce.

There is a strong argument that the Government should not be interfering in wage rates. The market should determine what people are truly worth in the workplace. For those who don't yet have the skills to earn enough to meet the costs of living, the Government would then step in to provide any income supplement required.

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Imagine how unemployment might be transformed if, rather than us saying "you have the skills to cover the minimum wage, so you can work, and you don't have the skills to cover the minimum wage, so you can stay unemployed", everyone could be accommodated in the work force.

Unfortunately, I don't see a move from a minimum wage rate to a minimum income level happening soon, but the reintroduction of youth rates is a step in the right direction.

I look forward to reduced youth unemployment over time and better outcomes for young people.

- The Marlborough Express

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