Adult minimum pay rate to kick in two years earlier

WELLINGTON - The Government has agreed to drop from 20 to 18 the age at which people must be paid the adult minimum wage.

At the same time it urgently wants feedback on what constitutes a minimum wage for 16 and 17-year-olds.

Labour Minister Margaret Wilson and Youth Affairs Minister Laila Harre said yesterday that the Government had agreed in principle to drop the adult minimum wage threshold on July 3 when the modern apprenticeship programme is introduced.

An estimated 10,000 18 and 19-year-olds are at present paid less than $7.55 an hour, which is the adult minimum wage.

The adult minimum was increased by the Coalition by 55c to $7.55 early last month.

The youth minimum wage, which was increased by 35c to $4.55 an hour at the same time, applies to those under 20, but in light of the Government's decision on lowering the adult threshold to 18 years, ministers want submissions on 16 and 17-year-olds by April 14.

The Alliance policy before the election was to make the adult minimum wage apply to people 16 years and over, but Labour had no clear policy on that age group.

The options given are:

* To increase the youth minimum wage for 16 to 17-year-olds by raising the ratio of the youth-to-adult minimum to somewhere between 60 per cent (the ratio as it stands now) and 100 per cent

* Setting the minimum wage rate for those with a training exemption between 60 per cent and 100 per cent of the adult minimum.

The discussion paper says that increasing the 60 per cent rate would improve the minimum wage rate for some 16 and 17-year-olds.

Many who would benefit were young people who left school early with low levels of skills and qualifications, including significant number of Maori and Pacific Islanders.

It also says that increasing the minimum rate might encourage some people who are not currently job-hunting to seek work, and might encourage those in work to work harder.

The paper also points out that employers might prefer to hire an adult rather than a youth or just not hire someone at all - again disproportionately affecting Maori and Pacific Islanders.

- NZPA