Starting-out wage to address youth unemployment

Labour Minister Kate Wilkinson has confirmed the introduction of a new starting-out wage.

It will help provide young people, whose employment prospects plummeted after the abolition of the youth minimum wage, with more opportunities to get into the workforce.

“The new starting-out wage will create demand for young people by giving employers a real incentive to take them on,” Ms Wilkinson says.

The Minimum Wage (Starting-out Wage) Amendment Bill provides for eligible 16- to 19-year-olds to be paid no less than 80 per cent of the minimum wage.

“The new starting-out wage will help some of our youngest and most inexperienced workers get a much-needed foot in the door, in what is currently a tight labour market.

“The starting-out wage was one of National’s 2011 campaign promises, and designed to provide 16- to 19-year-olds with the opportunity to earn money, gain skills and get the work experience they need.”

Three groups will be eligible unless they are training or supervising others:

  • 16- and 17-year-olds in their first six months of work with a new employer
  • 18- and 19-year-olds entering the workforce after more than six months on benefit
  • 16- to 19-year-old workers in a recognised industry training course involving at least 40 credits a year.

Those who are training or supervising other staff must be paid at least the adult minimum wage.

The starting-out wage will be simple for employers to implement, and will apply for a blanket six months after starting work with a new employer.

“The youth minimum wage was abolished in 2008 by Labour in a move that resulted in the loss of up to 9000 jobs,” Ms Wilkinson says. . .

Labour ignored the warnings that the abolition of the youth minimum wage would make it more difficult for young people to get work.

The steep increase in youth unemployment, proved those who made the warnings right and young people have paid the price for the misguided policy.

This initiative will address that, making the employment of young, unskilled workers less expensive and therefore offsetting some of the cost and risk of employing them.

 

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