Hon Ruth Dyson
Minister of Labour

25 July 2007 Media Statement

Youth rates recommendation strikes a balance

Requiring 16 and 17 year olds to gain 200 hours working experience before being paid the adult minimum wage is a balanced way forward on a complex issue says Minister of Labour Ruth Dyson.

“The recommended changes to Sue Bradford’s member’s bill by the Transport and Industrial Relations Select Committee would ensure that thousands of young workers will get an increase to their wage while also reserving a requirement for 16 or 17 year olds to be paid a new job entrant’s minimum rate for the first 200 hours of their employment.”

The committee has also recommended renaming the Bill as the Minimum Wage (New Entrants) Amendment Bill. The new entrant’s minimum rate would be no less than 80 percent of the adult minimum wage, and the 200 hours of employment could be accumulated across several different employers. The lower rate would not apply to young people employed as supervisors, because they have demonstrated higher capability and it would be unfair to be paid less than those they are supervising.

“We need to balance the positive impact that abolishing the lower rate of pay for 16 and 17 year olds will have for thousands of young workers against the possible negative impact of an incentive for for 16 and 17 year olds to leave school early with fewer qualifications.”

“The 200 hours threshold is intended to protect against this possible risk of a negative impact if youth rates were completely abolished. It also responds to employers’ submissions regarding socialisation in a work environment.”

“This measure will be yet another step in this Labour-led government’s steady progress in ensuring that all workers, including young workers, have fair minimum pay protection,” Ruth Dyson said. “That’s why we have not only raised the minimum wage every year, but raised the youth rate to be 80 percent of the minimum wage.”

In 1997, under National, at $4.20 per hour, the youth rate was only 60 percent of the adult minimum wage and was paid to 16-20 year olds. In 2001 the Labour-led government ensured that the adult minimum wage was paid to 18 and 19 year olds and raised the youth minimum wage for 16 and 17 year olds to 70 percent of the adult rate. In 2002 it raised the youth rate to 80 percent of the adult minimum wage, where it has stayed each year since. The minimum wage itself has been raised by a total of 62 percent since 1999.

“I realise that there may be some young people who are disappointed, but our balanced approach is a huge step towards reducing age discrimination while at the same time enabling government to monitor the impact.”

“This member’s bill is another good example of the Labour-led government working with other parties in an MMP environment to achieve the best solution for the diverse interests of all those affected by these changes.”

ENDS

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