CTU Media Release

5 December 2012

Invest in young people, don’t cut their wages

The Council of Trade Unions (CTU) opposes moves by the Government to reduce youth incomes, and calls for investment in skills development and decent jobs for young people.

CTU is appearing in front of the Transport and Industrial Relations Select Committee at Parliament today, and is calling on the Government to scrap the Minimum Wage (Starting-Out Wage) Amendment Bill.

Peter Conway, CTU Secretary said “youth unemployment is driven by a shortage of decent jobs rather than a problem over the rate of youth pay. We are calling on the Government to invest in young people, support training and expand job schemes and subsidies rather than reduce pay.”

Peter Conway said “this Bill doesn’t make sense. For instance it means one 18 year old worker could have two years’ experience at work, but have been on an unemployment benefit for 6 months meaning they can be paid 20 percent less than another 18 year old worker who has no experience at all”.

“In our submission we cite detailed economic research that shows that lifting the minimum wage has no, or only small, effects on employment opportunities. Employers surveyed this year by MBIE also said clearly that reducing wage rates would not act as an incentive for them to hire new staff. Reducing the minimum wage will not therefore boost job opportunities.”

Peter Conway said that the Government used similar arguments in 2008 and 2010 when it removed the right of workers to appeal against unfair dismissal in their first 90 days of employment.

“They claimed then”, he said “that young people and the long-term unemployed would especially benefit from such policies. But youth unemployment as well as long-term unemployment has only got worse”.

ENDS

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