Why the Nats Youth Rate is just plain bollocks

• Guest post
• 13 years ago
• Categories: national, wages
• Tags: youth rates

Labour candidate for Northcote Paula Gillon writes:

The Nats planned ‘starting-out’ youth rate is unfair, discriminatory and just plain bollocks

It’s no surprise that TV3 showed a clip on Friday night where young people talked about how they didn’t agree with National’s proposed new ‘starting-out’ youth rate and stated that it was “unfair” particularly as they weren’t old enough to vote against it.

It’s hard enough being a young person today without more discriminatory laws being thrust your way. We need to encourage young people to get a job; not slam them for six months when they do and treat them differently from their co-workers.

Being a student or in training is expensive. It never has been an ‘easy ride’ or a matter of a ‘life-style choice’, for many seeking to be productive citizens it is a necessity. Transport to and from university can be costly. Take for example your average student living in Birkdale, the bus into Auckland CBD and back costs approx $8.80 per day. If you go into classes four to five days a week then that could be an entire days wages on National’s ‘starting-out’ youth rate. It doesn’t leave much for food or rent does it? And before you say ‘move closer to the city’ a quick search of TradeMe’s ‘Flatmates Wanted’ will show you that a room in the city centre will cost you an average of $200pw while in Birkdale you are looking at approx $120 – $140pw.

What a great way to ‘start out’.

Gaining employment for young people is not just difficult, but it can also be costly. Having the right clothes for an office or retail job or getting the right work-boots are expensive up-front costs. Then, again, add on the cost of transport. You will end up with young people in training wondering if employment is really worth it. For some, it might cost more to be employed than unemployed. Many will be tempted to just get the Student Allowance and end up with double the amount of debt by the time they leave their training course. Didn’t someone say we were supposed to be reducing our debt?

But what about those young people coming off a benefit and into employment?

I’ll give you a scenario of what is likely to happen and you can tell me whether or not this is fair:

18year old ‘A’ has just finished school and is seeking full time employment. He/she has never worked before and has led a lovely cushy life living at home sponging off his/her parents (not that there is anything wrong with this!). 18year old ‘B’ has had a tough life, had to move out of home at a younger-than-normal age and ended up on the benefit, but now wants to get his/her life back on track through full-time employment. They both get employed in similar jobs: 18year old ‘A’ gets employed on $13ph but 18year old ‘B’ who is coming off the benefit is employed on $10.40ph. How is this fair? Why are we penalising young people for wanting to get off the benefit?

But don’t just take my word for it. Being the geek academic that I am, I decided to also provide you with a little bit of research. It really didn’t take me long to find the following gems.

• On the argument that more young people will be employed: “if a business is operating so close to the bone that a $100 per week wage costs differential determines whether anyone is taken off unemployment, the viability of the whole enterprise can only be described as precarious. The answer is not to tinker with and reduce wages, which typically make up 25 to 35 percent of operating costs, but to find ways of producing more for less” (Balls, 2010, pg. 64);
• “the economic arguments in favour of the youth wage are not inherently compelling; but rely for their credibility on the persistence of thinking that young people are not entitled to the same array of rights as adults and that they ought not be treated as if they have full human status” (Bessant, 2000, pg. 239);
• “The ‘youth wage’ extends the dependency on parent/s and guardians in ways that sit oddly with official claims that governments want to enhance young people’s active participation” (Bessant, 2004, pg. 396); and,
• then there is the research from academics at the London School of Economics who dismiss arguments that a youth minimum wage will increase job opportunities saying: “research has generally found few effects of the wage floor on jobs” (Petrongolo & Van Reenan, 2011, pg. 4).

I could add much, much more to this small sample.

What concerns me the most about National’s policy is not necessarily just how wrong they’ve got it, but their complete lack of empathy for young people. It wouldn’t have taken much to talk to some young people and ask them about how this would policy would affect their lives. And no, I’m not talking about discussing it with the types of young people who were in John Key’s hand-picked audience during their opening broadcast on Friday night who have wanted for nothing more than the latest iPhone. I’m talking about discussing this with young people who already find that after a small trip to the supermarket, paying rent, putting $30 petrol in the car and budgeting for bus-fares, they have nothing left over from their weekly pay.

It just shows that there really is no choice in this year’s election for young people. A vote for National is a vote for less pay and more debt. A vote for Labour is a vote for an increase in the minimum wage and more job opportunities.

And never forget, three years is a very long time…

Paula Gillon

Paula is the Labour Candidate for Northcote, has a MPhil in Public Policy and is currently completing her PhD in Public Policy, when she’s not out keeping Gotham City safe.

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References:

Balls, A. 2010. Statistical stumblings: Ashley Balls unravels the ‘spin’ on the ‘minimum wage causes unemployment’ myth. NZ Business.

Bessant, J. 2000. The Youth Wage and Age Based Discrimination: rights vs jobs. Australian Journal of Social Issues, 35:3.

Bessant, J. 2004. Mixed Messages: Youth Participation and Democratic Practice. Australian Journal of Political Science, 39:2.

Petrongolo, B. and Van Reenan, J. 2011. Youth Unemployment. Centrepiece, 16:1.