14 December 2000

"The Government's decision to increase the youth minimum wage will inevitably have negative effects on some teenage workers and on young people seeking employment," National's Max Bradford said today.

"The Government's boast that 20,500 people will be getting a wage boost is only half the story. For some of those people it means their existing job will disappear, while for those seeking work it means the number of jobs available goes down.

"Economic agencies such as the OECD say that increasing youth minimum wages leads to a decrease in the number of jobs, as employers are forced to cut the number of staff they employ to avoid increasing their total wage bills. It also serves as a disincentive to employers who are considering taking on extra staff.

"The question is whether resources should be focussed on increasing the income of those already in employment, or be used to create more jobs.

"A balance must be struck between the needs of teenagers on low incomes, and the needs of teenagers who are trying to get a job so they can gain experience in the workforce.

"Today's announcement is an example of the Government giving a treat to its voters, but letting employers pick up the bill. It is a business-unfriendly decision by a Government which is business-unfriendly. It once again shows that this year's Government Business Forum was a hollow gesture, which the Government had no intention of following through on," Max Bradford said.

Ends

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