With one eye firmly on the polls and an awareness that cutting wages by stealth is one thing but actually lowering wages is another, National has decided to oppose Roger Douglas’s youth minimum wage reduction bill.
That hasn’t stopped the right activists from promoting it though, so I thought it would be worthwhile having a wee post summarising the arguments on both sides:
Rightie: Youth unemployment is out of control! It’s all due to the abolition of youth rates!
Leftie: OK, first, the youth rate only ever applied to people aged 16 and 17 whereas the ‘out of control’ youth unemployment age group you’re talking about is 15-19. It’s a fair bet that most of the unemployed in this age group are 18 or 19, since most of the rest are at school.
Second, we’ve got rising unemployment thanks to a recession and a do nothing government. Who loses their jobs first when jobs are cut? The least experienced, the lowest skilled, those without a family to support (bosses are human too). Kind of describes young people, eh? In fact, youth unemployment is always significantly higher than general unemployment and you could expect youth unemployment to go up at at least the same rate as general unemployment. That’s what has happened, it is nothing to do with youth rates.
Rightie: I stopped listening at ‘OK’, all that maths stuff is phooey. Statistics can be made to mean anything, 68% of people know that. If we cut the youth minimum wage back to where it was, employers will be able to pay a wage that reflects the amount of wealth the worker produces and, so, could afford to employ more youth workers. Currently, it’s just not worth their while to employ someone who is inexperienced.
Leftie: Well, wages aren’t directly tied to productivity like you’re assuming anyway. Wages are determined by supply of labour and demand for it with a bottom constraint set by the minimum wage, not the productivity of that labour. But well since you’re just going to ignore the empirical argument, how about an argument from principle? How is it right for one person doing the same job as another to be paid less? Why should an 18 year old flipping burgers get $12.50 ($12.75 soon!) while the 17 year old beside him doing the same job gets $10? How is that right?
Rightie: Having a lower minimum wage for teenagers is exactly that a lower floor. How the hell you translate that into youths should be paid automatically at a lower rate I do not know. Once again this is about a floor not a ceiling, not an automatic rate that you must apply to teenagers.
Leftie: But isn’t the whole crux of your argument that employers are being forced to pay teenagers more than they otherwise would and so aren’t employing them at all? If reducing the youth minimum wage to a lower rate than the ordinary minimum wage wouldn’t see employers lower the wages they pay youths (and supposedly employ more of them) what’s the point? Actually, the point of minimum wages is that they increase wages at the bottom end of the scale, that’s why you righties are always opposing increases.
Rightie: Um…
Leftie: And if it’s right to lower the youth minimum wage because you think it is making them unemployable, why not apply that logic to other groups? Maori minimum wage? The logic is exactly the same.
Rightie: Shut up. This conversation is boring.
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