The government wants to introduce (or re-introduce) a minimum youth rate and call it a Starting Out rate. It'll be $11 per hour.
Their professed aim is to get youth into employment.
My problem is this. Will more jobs be created because the price of labour is lowered, when job subsidies already exist and we still have high youth unemployment? An employer can already hire a young person at less than the minimum wage if he receives a Work and Income subsidy.
While NZ is still feeling the effects of the GFC will the difference between $13.75 and $11 create more jobs or simply represent a loss to the worker and a gain to the employer? In a growing economy I'm sure the optimum would be realised - more jobs. But currently, I don't know.
I support the move but with reservations about it being the silver bullet for reducing youth unemployment.
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6 comments:
I've had a brief look at the proposal and it sort of looks OK.. but probably best for an organisation that has admin staff who are able to compare options plus experienced staff to look after the young person.. so this proposal isn't for the tens of thousands of small businesses out there who are likely better served with contractors who are immediately effective and go away as required.
As one of those small businessmen my gut feeling is I don't want to be entangled with youths who come attached with some sort of Govt sticker.
JC
JC
Will employers enable the experienced staff to teach,coach,encourage the youth.Or will they still expect the same work out put as per usual?
I know of an employer in the construction industry who gets cheap subsidized youth and gives them no pencil,no measuring tape and no plan to help them become experienced or trained.Many leave or are laid off after 3 months with less confidence and more disillusioned
Tracey,
Thats part of my caution about this and other such schemes.
For me as an employer a wage subsidy would be a false economy because I would, in fact, have to work harder for longer to support even a subsidised employee. My labour needs, if required tend to be short term and need to be for specific experienced help where I have to pay $30-60 an hour.
The same or similar happens with small regional charities.. volunteers spend 90% of their time working (and worrying) not helping the disabled and sick, but raising money for a salaried employee with sometimes less than adequate skills to look after said sick and disabled.
I often wondered if we volunteers would better spend our efforts doing the job ourselves.
JC
Why do we automatically penalise all for the abuses of the relative few. We do this year after year, decade after decade, and we never learn from past experience. Tracey, so what about your poxy example. Baby/bathwater.
The whole objective should be personal choice = personal responsibility = personal experience.
I happen to like the Australian example, which is a much lower starting out rate than NZ is considering.
The ONLY consideration should be whatever it takes to get a young person into a work habit from the get go. No-one is forcing a 16-y-o to work for slave rates.
But if the 16-y-o is willing to get some work experience at $8 per hour, and there is an employer willing to take them on at this rate, what harm is done by it? I say none. I say only good is done by it.
Nanny State, stop interfering where your politically correct social engineering is not natural. Nanny state, stop hindering work experience.
Ironically (and hypocritically), we turn a blind eye to plentiful examples of unpaid work experience.
This tangled mess we get when government bumbles about in the labour market...where it has no place being.
No-one is forcing a 16-y-o to work for slave rates.
more's the pity. Actually it's much worse than that: we force teens to remain in state indoctrination / babysitting centres and we tax the productive 5% nett taxpayers to pay for that babysitting and indoctrination!
But if the 16-y-o is willing to get some work experience at $8 per hour, and there is an employer willing to take them on at this rate, what harm is done by it? I say none. I say only good is done by it.
If a 16-yo or a 60-yo wants to eat, then they should take whatever's going. If it's $8/hour or $1/hour or just bed and board.
Work - like food or anything else - is a privilege not a right - a privilege that frankly 80-95% of Kiwis (non nett taxpayers) simply don't deserve
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