January 30th 2002 Media Statement
Minimum Wage Review brings welcome boost for young and low paid workers

The new youth minimum wage rates announced today have been heralded by Hon Laila Harré, Minister of Youth Affairs and Associate Minister of Labour, as a win for young people and as a further achievement for the Alliance in government.

Today’s announcement confirms a decision made last year to increase the minimum wage for 16 and 17 year olds to 80% of the adult minimum wage. Young workers on the minimum wage will now receive $6.40 an hour, as compared to $5.40 an hour, an increase of 18.5%.

The Adult Minimum Wage will also increase from $7.70 to $8.00 an hour, an increase of 3.9%.

The minimum wage has been an Alliance priority during the first term of this government, with an immediate increase agreed as part of coalition discussions in 1999.

"After the initial increase the Alliance pursued improvements in the youth minimum wage very vigorously. Now that 18 and 19 year olds are entitled to the adult minimum and 16 and 17 year olds are 20 per cent closer to it, on 80%, we are closer to closing that gap."

Employment figures for the year since the youth minimum wage was abolished for 18 and 19 year olds show an increase of 12.8% in employment and a 4.6% reduction in unemployment which Laila Harré says puts paid to some of the scaremongering which often occurs when minimum wages are increased.

Laila Harré says that the Alliance will continue to seek improvements to the youth wage (Alliance policy is to abolish youth rates) but will also now be focussing on improving the relativity of the minimum wage to the average wage.

"We prefer the European system of pegging the minimum wage to the average wage. Their ideal is 66% of the average. At the moment ours is only around 42% of the average, which is a very low base. The Alliance agrees with trade union submissions on the minimum wage review that the wage should be at least 50 per cent of the average."

ENDS

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