National announces cuts to minimum youth wage levels - a disastrous policy that will destroy jobs, not create them
National’s announcement today of cuts to the minimum wage for many young workers is yet another example of this Government’s determination to destroy jobs rather than create them.
Kate Wilkinson boldly states that the cut to 80% of the minimum wage for up to 40,000 young workers will "help get more New Zealanders into jobs in the wake of the Global Financial Crisis."
What a load of rubbish.
If employers do choose to take on young people at $10.80 an hour instead of the current minimum $13.50 per hour, the most likely outcome will be that people currently employed will be replaced by the cheaper workers on offer, leaving older folk on the scrapheap instead.
Bringing one worker in the door at lower wages while sending another out the back to the unemployment queue does not create jobs.
Placing downward pressure on wages will also lower incomes, meaning less money in the economy, in turn resulting in further job losses.
As John Ryall of the Service and Food Workers Union says, the current minimum is already ‘too low for anyone to live on.’
To those readers who think meeting food, clothing, transport and accommodation costs at $10.80 an hour is not problematic, especially in a place like Auckland, I’d invite you to take a quick look around the supermarket or at the latest accommodation ads in our region.
This is not about new jobs. It is about pressing labour costs down as far as possible to maximise business profits.
Even worse is the fact that National is now extending the age of ‘youth’ up to 18 and 19 year-olds, not just those aged 16 and 17.
I continue to fail to understand how any rational government can contend that a) it costs less to live if you’re aged 16 -19 (just think of the food bill alone); and b) that somehow young workers are worth less to an employer than older workers.
A few decades back New Zealand enacted laws which meant women were entitled to the same pay as men. I imagine no one would question that now.
Yet there is equally no justification whatsoever for the belief that somehow people aged 16 – 19 are worth less than older workers. In fact people in this age group are often fitter, stronger and smarter than some of their elders.
National is even rolling back provisions of my successful 2007 member’s bill on youth wages so that even where young workers have already been in work, if they start a new job their employer will still be able to pay them the reduced rate.
This flies in the face of any government contention that the new measures are aimed only at those currently unemployed.
All this comes at a time when job cuts are biting deep in to our manufacturing and public sectors.
The EPMU has called an urgent jobs summit for Friday this week.
Unions and workers know – even if the Government pretends it isn’t happening – that job losses at Kiwirail, Nuplex, Tiwai, Spring Creek, Huntly, in the courts … and elsewhere … will deeply affect not only the workers themselves, but their families and the communities around them.
Forcing youth wages down will not create a single job for a laid off miner in Greymouth or a court registrar in Warkworth.
Nor will all Paula Bennett’s welfare reforms help create one new job, as Gareth Morgan so cogently points out in a recent article. As Mr Morgan says, ‘Forcing mechanical engineers to be bouncers is just a game of musical chairs replacing one bouncer with another. Unless the economy gets going you are not going to see fewer people on WINZ’s books.’
Today’s announcement is yet another quickstep in National’s game of musical chairs, the sad part being that it’s not a game, and it is peoples’ livelihoods – and lives - at stake.
I wish the EPMU and all involved all the best for their summit on Friday.
We need some sensible, creative thinking about not only how to keep some jobs in this country but also about how to create new ones - without expecting Australia to always be there to pick up the slack.
If the Australian economy continues to slow the pressure release it provides for New Zealanders seeking work will gradually tighten.
Put that together with downwards pressure on wages deliberately fostered by Government and mean welfare reforms which sanction and harass those unfortunate enough to be unemployed, and the future looks pretty bleak.
As FIRST union pointed out on Sunday, it is decent jobs and security of employment that New Zealand workers need.
Without that, we are doomed to a vicious cycle of growing unemployment, a wider rich poor gap, and a deepening desperation among those whom the economy and state have cast aside.