The starting out wage

Kate Wilkinson has announced:

The Minimum Wage (Starting-out Wage) Amendment Bill provides for eligible 16- to 19-year-olds to be paid no less than 80 per cent of the minimum wage.

“The new starting-out wage will help some of our youngest and most inexperienced workers get a much-needed foot in the door, in what is currently a tight labour market.

“The starting-out wage was one of National’s 2011 campaign promises, and designed to provide 16- to 19-year-olds with the opportunity to earn money, gain skills and get the work experience they need.”

Three groups will be eligible unless they are training or supervising others:

• 16- and 17-year-olds in their first six months of work with a new employer
• 18- and 19-year-olds entering the workforce after more than six months on benefit
• 16- to 19-year-old workers in a recognised industry training course involving at least 40 credits a year.

This is not a return to youth rates. While Labour will wail about this, the reality is that it is a modest extension of what they had in place.

Labour had a “new entrants” wage which also was at 80% of the minimum wage. It was for the first three months or 200 hours. Almost no employers (2%) utilised it due to the uncertainity over hours.

All National has done is doubled the period from three to six months, and extended its availability to those coming off a benefit.

So if you get a job at age 16, then at age 16.5 you will have to be paid the adult minimum wage if with the same employer. And please don’t tell me employers will sack staff after six months as a way to save money. Only a moron with no actual experience as an employer would think that. Staff recruitment and training is expensive.

Personally I would go far beyond what the Government has done. I would have no minimum wage at all, until people are legal adults at 18. The most important thing for a 16 or 17 year old s to start to gain some work experience. They almost invariably are living at home, and are not paying their own way in life yet. The value of an initial job in terms of skills, maturity but also references for future jobs is immense.

Why have the minimum wage start at 16, not 15 or 17 or 14? 18 is the logical age.

I do like the lower starting off wage for people coming off an extended spell on a benefit. But I’d not make that age restricted. I’d have that for anyone who has been on a benefit long-term.  So long as the work is paying significantly more than the benefit, then getting them that opportunity is all important.

This change is in fact quite minor. I can guarantee you that the media will treat the minimum wage change, as a maximum wage, and interview teenagers complaining about it, and portraying it as cutting their wages when it does no such thing. No one in a current job can have their wages cut. All it means is that they can be offered a job at a 20% lower rate than the adult minimum wage, for their first six months. The trade off is that it will mean more of them get jobs, but some of them will get paid less (for six months) than what it would have been. I have no faith that the media will get this distinction at all right.