KEY POINTS:
At some time, probably not too far away, youth wage rates will become largely a thing of the past. That much seems inevitable, given the crumbling of the case in favour of them. Not yet, however. The Minimum Wage (New Entrants) Amendment Bill, which has passed its committee stages in Parliament, has been watered down to provide that 16- and 17-year-old workers will move on to the full adult wage after 200 hours of work or three months' employment. This has disappointed the bill's sponsor, Green MP Sue Bradford, who wanted youth rates scrapped totally. Yet she has little cause for such sentiment if she considers how much progress has been made in a relatively short time, and how in some cases workplace practice has raced ahead of the law.
Before 2001, a minimum youth wage, applying to 16- to 19-year-olds, was set at 60 per cent of the adult minimum wage. It was thought this would encourage employers to hire and train young people with little or no experience. Since then, eligibility for the adult minimum wage has been lowered from 20 to 18 years,and the youth wage has been raised from 60 to 80 per cent of the adult minimum.
At every stage of this process, and, again in Parliament last week as the latest legislative advance was debated, there weredire predictions of increased youth unemployment. Getting afoot in the door would, said critics, become far more difficult for young people.
It has not happened. Indeed, a Treasury study, released in 2004, found the reverse. Sixteen and 17-year-olds had actually increased their hours worked by 10 to 15 per cent following the changes. This finding reinforced similar research overseas. If there was a cause for concern, the Treasury study concluded, it lay in a decline in educational enrolment. Young people, encouraged by the higher wages on offer, could be happy to leave school earlier than might otherwise have been the case.
This suggests we should pause before extending the coverage provided by the latest legislation to workers under 16. Young people's long-term prospects could be compromised if they leave school at the earliest opportunity for short-term financial reasons. And therein lies the major question-mark over the decision last week of supermarket operator Progressive Enterprises to go further than the Bradford-sponsored bill by extending its coverage to 15-year-old workers.
Progressive has joined the likes of BP and Restaurant Brands in acting against what, in many cases, has been a cheap option based on the exploitation of youth rates. Such companies have, after a little cajoling, acknowledged, in effect, that such rates are a form of discrimination. Youth rates, by their very nature, mean that people are not paid equally for work of equal value. The only valid ground for such distinction is if the work of a young employee - an apprentice, say - can be shown to be worth less than that of a more experienced worker.
But that is hardly so for youths who find work in run-of-the-mill activities such as retailing, hospitality and food servicing. Little training is generally required or done. Experience barely matters. Indeed, older workers need as much time to get to grips with the job as young people. In such cases, the stipulation that three months or 200 hours of work must precede the payment of an adult rate becomes spurious.
The waiving of that probation period in selected circumstances will surely be the next step. In the current legislation, it acts as a sop to employers, but has little point and, indeed, creates a compliance burden. Those over 16 deserve a system that is tied solely and unreservedly to their skills. They should get it soon enough.
