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Manufacturing jobs: youth wage and benefit ‘merry’-go-round

Written By: - Date published: 11:00 am, October 9th, 2012 - 18 comments
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Key and his ministers are trying to spin away the bad news about the crisis in manufacturing (as well-analysed by Anthony Robins this morning on the Standard).  The government needs to claim there is no manufacturing and job crisis, in order to justify an extension of a low and menial youth pay (to be announced today).  It is also as cover for the fact that most people who move off benefits, don’t do so to get jobs, and that a large number just move to another benefit.

Both the NZ Herald and Stuff are reporting that the government will announce an extension of the “youth wage” today, rebranded as “starting out”.  However, with the kinds of wages on offer, and (as Claimed by Matt McCarten) the proliferation of casual, part time and temporary jobs, such jobs are just as likely to be a dead end as the foot in the door to a blossoming career.

Danya Levy on Stuff reports,

The Government is expected to announce details of a ”starting out” wage today in a attempt to get more 16 and 17-year-olds into work.

Economic Development Minister Steven Joyce, Social Development Minister Paula Bennett and Labour Minister Kate Wilkinson will this morning release the Government’s Building Safe and Skilled Workplace programme which is the third of six business growth agenda reports.

It is understood it will include introducing a starting out wage that will be set at 80 per cent of the $13.50 an hour adult minimum wage.

It will effectively double the time workers can be on the Government’s training wage to six months.

Under that regime the $10.40 an hour rate can be paid for three months or 200 hours, whichever comes first.

These changes are unlikely to increase the amount of jobs paying  a living wage.  They would have many undesirable consequences, including taking jobs from some older people and giving them to young people at a lower wage. This is effectively a subsidy to employers. Claire Trevett in the Herald reports,

Announcing the policy last year, Mr Key had said the lower wage would give many youth “a much-needed foot in the door” and encourage employers to take on youth, rather than more experienced workers.

But Labour argued that it would instead send young workers over to Australia where the pay was higher.

Meanwhile, according to Kate Chapman, Labour MP Jacinda Ardern has received a reply to written parliamentary questions.  It seems that Paula Bennett’s claims that her reforms have resulted in more people moving off benefits into work is a bit of a distortion.   In August she claimed 6225 people moved from benefits to work.  In contrast, in the 3 months to June 30 50,561 came off benefits but didn’t go into work. The biggest number of people moving off benefits are just shifted to another benefit. The next largest movement is the group labelled “8 weeks after a change of circumstances”, then “Full Time Student”.

Here is the list of movements, taken from Chapman’s article and rearranged in order of the greatest to least numbers moved from a benefit:

People of working age whose benefit was cancelled for reasons other than ‘obtained work’ from April 1, 2012, to June 30, 2012.

  1. Transferred to another benefit: 18,525
  2. Eight weeks after advising of change in circumstance: 9983
  3. Fulltime student: 3430
  4. Lack of medical coverage: 3201
  5. Change in marital status: 2659
  6. Didn’t reapply: 2301
  7. Other: 2142
  8. Left New Zealand: 1970
  9. Failed the work test: 1700
  10. Lack of representation (didn’t do something required): 1289
  11. In prison: 1070
  12. Excess income/assets: 713
  13. Died: 678
  14. DPB recipients no longer with dependants: 528
  15. Left or ceased a course: 372

 [NB]: Interesting to note how quickly the TV3 and TV One 6pm News last night, picked up on Key’s spin line about “manufacturing a crisis”.  TV One reinforced it in with the print subtitle:  Manufacturing Crisis in their news summary.  Kudos for TV3 for pointing out how deliberately Key continually repeated there is no crisis.

Both channels willingly aired the visual reinforcement provided by the government, with photo ops of Key in industrial glasses on a factory floor (also conveniently  countering the recent images of Key schmoozing with the rich and famous in Hollywood).  In contrast, the opposition leaders were shown to be taking a more academic approach to their criticism: Russel Norman in a study with shelves of books behind him; Shearer and Parker seemed to be speaking in an empty classroom.

[Update]According to her own standards, Paula Bennett should be ashamed!  In reply to heckling from Sue Moroney in Question Time on 12 September 2012, this was Bennett’s response:

Sue Moroney: Trying to look busy. Doing nothing about jobs, trying to look busy.

Hon PAULA BENNETT: Opposition members call out, but, actually, although the unemployment benefit did drop under them, we saw the sickness benefit increasing, we saw the invalids benefit increasing, and actually they should be ashamed of what they did for those people in that time.

New policy announced, Government press release, CTU press release (Low Wages No Solution), Service and Food Workers  Press Release (Poverty Pay Won’t Give Young Workers Skills or Jobs), Labour Party press release (Low Wage Future No Future At All), Green’s press release (pay cut for young workers).


18 comments on “Manufacturing jobs: youth wage and benefit ‘merry’-go-round ”

  1. David H 1

    I also noticed that companies can now hire 16 and 17 years olds. And some 18 and 19 year olds as well for like 10 bucks an hour for the first 6 months. So now we have the Adult 3 month ‘trial period’ and now we also have for the teens slavery for 6 months (well it is) and then what ? Rather than pay them the minimum wage ie: a pay rise of like 3.85 an hour. Whats to stop them saying so long and hire the next kid or just tell them they stay at 10 bucks or they’re gonners? Sound Joyce tactics there.

    • Tom Gould 1.1

      I can see Key telling the Hollywood moguls, between caviar canapes and sips of vintage Dom, that they will soon be able to hire youth extras and gofors for $US8 an hour back home.

  2. captain hook 2

    the whole fact of the matter is that no one in new zealand can really make or do anything.
    we are dumkopfs and if we do succeed then someone comes along and buys the bizzo out and moves it offshore.
    In the meantime the NZX wants the states assets to add depth to the stockmarket.
    what a fucking laugh.
    all the upper echelon in NZ can do is talk about it.
    they can make tons of hot air and frig all else.
    Oh they can make things hard for the people who need jobs!

  3. Jokerman 3

    you give, and take away

  4. xtasy 4

    How revealing those figures are! Bennett’s spin has been exposed as total BS!

    Re the mainstream media giving so much, more or less biased publicity and credit to Key’s comments re manufacturing and the crisis that apparently does not exist on “planet Key”:

    Who once ran Mediaworks, owners of TV3, Radio Live and so forth? Steven Joyce, now “multi minister” for almost “all affairs” with ANY relevance to economic planning.

    Who sits on the board of TVNZ and hase quite some influence? A known National Party lobbyist.

    Who pays the bread and butter of TVNZ staff? The government, presently run by NatACT.

    Who pays the bread and butter of most media? Indirectly at least the advertising industry and their customers (selling products and services).

    Who owns the newspapers and their online equivalents in NZ? APN and Fairfax, both Australian corporations with their NZ enterprises.

    What only sizeable broadcast media other but TVNZ, TV3 and their owners exists in NZ? Privately owned and run Sky TV, whose owners should be known to many.

    You do not bite the hand that feeds you, especially in the environment of large scale restructuring and sizeable lay offs. That is where journalism in NZ – and sadly also most other places -stands.

    So much for “independent” reporting, and no wonder they rather stick with Key and his government, as all the “paymasters” of mainstream media do have a vested interest in keeping things as they are.

    And there is ample presence of the “old boys network” in it too.

  5. Dr Terry 5

    Yet again, one is left breathless! I am trying to count the number of dreadful things that have happened under this Government in recent weeks/months that already appear to have been lost to sight.

  6. Mary 6

    Just heard Megan Woods on RNZ’s The Panel. She was appalling. Slagged the extension of youth rates – great – but then went on to offer not one single alternative. She was absolutely abysmal. If that’s all Labour can put up we’re doomed.

    • karol 6.1

      Well, to be fair, in the links above to the Stuff article, Labour said this:
      Labour would pay employers to take on apprentices, raise the minimum wage and foster innovation through research and development tax breaks, he said.
      ”We will create wealth through innovation and by supporting our businesses.  We can’t sit back and continue to see manufacturing jobs being shed – 40,000 have already been lost over the last four years.”
      And in their press release linked at the bottom of my post, this:

      Labour has real ideas that will make a difference. We will pay employers the equivalent of the dole to take on apprentices, raise the minimum wage, create a world-class education system, foster innovation through research and development tax breaks, tackle the high dollar by changing monetary policy and encouraging investment in the productive sector through a capital gains tax. 

      And I’ve added a quote to my post above – from Bennett about a month ago, saying that Labour should be ashamed of what they did in government, shifting people off unemployment benefits on to sickness and invalid benefits – which seems pretty much like what’s been happening under Bennett’s watch.

  7. felix 7

    So I just heard Kate Wilkinson on RNZ saying the youth wage is all cool, and it might seem a bit low but not to worry because “every job they get after that will be at the adult minimum wage”.

    A freudian slip shows just where their heads are at. It’s the low wage, low skill National Party dream.

  8. xtasy 8

    I like John Key now, as he looks like he would make a good butler.

    If he cannot get a job as butler at the Vatican, to cater for the Pope, I will consider giving him a well paid job on the minimum wage as my personal butler, after he will no longer be the Prime Minister.

    As such a genuine, honest, hard working and well motivated man of true highest value, I am sure John Key will value every job opportunity given, especially if it may be offered through WiNZ.

    I look forward to have my evening red wine poured into my glass by John, he looks like he is a real gentleman and is well qualified to do the job very well.

  9. Gosman 9

    What a surprise – the abolition of the Youth minimum wage by Labour likely led to massive increase in youth unemployment.


    • vto 9.1

      I propose reducing wages even further, just like in your over-egged Zimbabwe analogies, and in so doing reduce unemployment to near zero, just like in Zimbabwe.

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