The statistics on the youth unemployment rate are unequivocal – it increased far more steeply than rate for older adults when the youth minimum age was axed by Labour.
But have people and parties on the left learned from that? No.
Yesterday Labour Minister Kate Wilkinson announced a starting-wage for young people and immediately got this response:
Lower wages no solution – from the Council of Trade Unions.
Poverty pay won’t give young people skills or jobs – from the Service and Food workers Union.
More youth to pack for Australia – from Hone Harawira.
National offers young workers a hefty pay cut – Metiria Turei.
And low wage no future at all from David Shearer.
None of these people have joined the dots between increasing the cost of employing young people and the sharp increase in the unemployment rate for that age group.
The Employers and Manufacturers Association has a far more positive view of the starting-wage:
Everyone concerned about our alarming rates of youth unemployment should be celebrating today’s announcement on the Starting-out wage, says David Lowe, Employment Services Manager for the Employers and Manufacturers Association.
Then they will be looking out for more ways to help, he said.
“Without an incentive an employer with a choice between an experienced worker and an inexperienced worker will choose experience every time,” Mr Lowe said.
“Though there is no silver bullet for creating jobs for young people, the Starting-out wage offers a vital first step up the employment ladder.
“Unless there is an incentive for taking on the added issues of employing youth workers, young people will continue to be over represented in the unemployment numbers.
“The Starting-out wage will restore a form of youth rates that were abolished in 2006 and which proved, as predicted, to hurt the very people its supporters were trying to help.
“Independent research from Pacheco at the time found job opportunities for youth would fall by nearly 20 per cent for all teenagers if youth rates were abolished, but that turned out to be very conservative.”
BusinessNZ also sees the starting-wage will benefit the economy and communities:
Chief Executive Phil O’Reilly says having to pay unskilled teenagers at adult rates makes it hard for many young people to get a job.
“Not being able to get that initial job prevents many young people from gaining workplace skills, further reducing their future employment chances.
“A starting-out wage at 80 per cent of the minimum wage for the first six months’ employment will make it easier to employ a young person so they can gain those vital workplace skills.”
Mr O’Reilly said the policy announced today would particularly benefit teenagers who were vulnerable to being trapped on a benefit through being unable to compete effectively for a first job.
Costings indicate that with accommodation and other applicable subsidies unaffected, a teenager on a starting-out wage would earn more than if on a benefit.
“Getting more young people into jobs – especially including those currently on a benefit – will benefit the economy and communities all through New Zealand,” Mr O’Reilly said.
If employers have to pay people the same rate they are almost always going to favour age and experience over youth and inexperience.
Enable them to pay younger people a bit less in recognition of the bigger investment required in training and the bigger risk with people with no work experience, and they will be more willing to take them on.