Will 'youth rates' help to lower unemployment?

3:28 PM Wednesday Nov 14, 2012

Digital image / P.K. Stowers

Workers' unions have been quick to write off the Government's plan for a new, low, starting pay, while business leaders say it will help create jobs.

Labour Minister Kate Wilkinson said the "starting-out" wage of $10.80 an hour would allow employers to pay eligible 16- to 19-year-olds no less than 80 per cent of the minimum wage, which is $13.50 an hour.

Ms Wilkinson said the introduction of the new wage, from April 1 next year, would help provide young New Zealanders with more opportunities to get into the workforce.

Food Service and Food Workers Union national secretary John Ryall said the Government's plan to cut pay for 16- to 19-year-olds would not create jobs or give young people any skills.

Will 'youth rates' help to lower unemployment? Here is the latest selection of Your Views:

economist (New Zealand) | 08:28AM Thursday, 15 Nov 2012

Youth rates to lower youth unemployment are a no brainer. Since they were abolished, youth unemployment has soared. Anything that reduces costs for a business helps too. And if the youth worker proves to be outstanding in their new job, they will soon reach or surpass the minimum wage anyway.

Youth rates combined with the 90 day trial period should have a marked improvement on youth unemployment. As for John Ryall saying a reduction on the pay rate or 16-19 year- olds won't create any jobs, what a load of nonsense. The evidence is right there in plain sight.

Odette (Auckland Region) | 08:29AM Thursday, 15 Nov 2012

Research suggests that youth unemployment went up at a greater rate after removal of youth rates. Reasearch also tells us that keeping young people out of the employment market has a dreadful flow-on effect and they stay out of the work force much longer than if they had gained valuable experience by securing a job on youth rates. The longer they stay out of the market - the lessl likely they are to get a job ever.

This is a no brainer and Sue Bradford should be making an apology for her ill thoughtout moves to remove youth rates in the first place. There are thousands of young people without jobs in the economy now because of her schemes.

Beenthere (New Zealand) | 08:46AM Thursday, 15 Nov 2012

Youth rates, 90 days bill etc. All anti worker pro employer laws. The theory being the easier it is to hire and fire, the more jobs will be created. However, unemployment still continues to climb. These laws are driven by idiology and therefore the govt will continue to pass them despite their proven failure.

The real causes of unemployment are caused by the steadily falling wages of the last 40 years. "As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery. " [Marriner S. Eccles]