Wilkinson Kate: Minimum Wage (Abolition of Age Discrimination)Amendment Bill — Second Reading 
Wilkinson Kate: Minimum Wage (Abolition of Age Discrimination)Amendment Bill — Second Reading 
[Volume:640;Page:10707] 
KATE WILKINSON (National) 
: 
 In rising to speak to the second reading of the Minimum Wage (Abolition of Age Discrimination) Amendment Bill it is interesting to note that when this bill was originally introduced by the honourable member Sue Bradford it was quite simply to get rid of the youth rate. It then morphed into a bill that introduced a new-entrants minimum rate that would apply for the first 200 hours of employment for 16 to 17-year-olds during which time they would be paid 80 percent of the adult minimum wage—that is the youth rate—and after which they would be paid the adult minimum wage. The question is whether the bill is better or worse than before it went to the select committee. Who knows? Media reports over the issue originally suggested that the bill itself may be pulled by the very author of the bill because it has been so altered since its original draft that it is now being opposed. 
I would like to make one comment in relation to what the honourable member Sue Bradford has stated and that is in relation to age-based legislation and whether it is discriminatory. The wonderful irony of that argument is that if it is age-based legislation—and it is age-based legislation—and if it is discriminatory which we do not believe it is and if it does comply with the New Zealand Bill of Rights Act then it would be discriminatory and still age-based whether the age was 12 16 18 or 20. So whatever the age limit it would based on that argument still be age-based legislation and all this bill does is increase that age to 18. 
Can I say at the outset that whatever one’s view on this it is important to state that National believes that all workers whatever their age should be valued for the work they perform. They should receive fair pay for a fair day’s work. We all want a high-wage economy but that is not achieved by propping it up by artificial and arbitrary levels. It is also important when considering passing legislation that some consideration is actually given to the consequences it will have to the problem it is supposed to be addressing to the solution it proposes and to whether that solution will work may work or may in fact do the exact opposite of what it is trying to achieve. 
 We believe that this bill will not work for youths or for employers for a number of reasons. We heard submissions that many employers already pay above the youth minimum wage. In fact some employers pay their staff above the adult minimum wage because they recognise that the value staff provide warrants a higher level of pay. Secondly in some cases youths may not be able to provide the same value to an employer as older employees so the minimum rate of pay provided to them should be set at a lower rate than for those older than they are; they are not doing the same job. 
There may be youths who suffer because in future employers will have to factor in a full wage bill for youths and may choose not to employ them at all because of this. This may be a disincentive to employing youth in the first place. 
Dr Wayne Mapp 
: A perverse incentive. 
KATE WILKINSON 
: It is a perverse incentive. Increasing the minimum wage that a 16 or 17-year-old can earn creates an added perverse incentive for youths to leave school. We appreciate that there is a 200-hour threshold and that the initial reduced take-home pay may lessen the incentive for a youth to leave school to undertake work. But assuming someone left school to undertake full-time work or near full-time work the 200-hour threshold would be finished maybe within a month or a month and a half. The incentive to leave is still reasonably high for some. We want a highly skilled high-wage economy and encouraging youths to leave school before they have attained those skills is not the right way to do it. 
Furthermore if youths have to be paid at the adult rate then some employers may simply choose not to employ them. In effect raising the youth minimum wage rate will risk young persons being priced out of the market. In some cases employers who pay 16 or 17-year-olds the youth minimum wage do so because that is all they can afford. That is the price that is set. If youths had to be paid at the adult rate then the employer may simply choose not to employ them. We are concerned that this bill may price young people off the job market. That is a very very serious consideration and a very important reason for National to vote against this bill. National is not against the employment of youth. This is about fair pay for fair work. We do not want this bill to be seen as a barrier to employing young people. 
Support for a youth rate is premised also on the belief that 16 and 17-year-olds are not worth as much to their employers as someone aged 18 years or more. The new-entrant rate compromise is designed to recognise that 16 and 17-year-olds initially are not worth as much as someone who is older but it suggests that after 200 hours of employment those young people have had enough experience in the workplace to mean they have the same value to an employer as someone over the age of 18. We have heard—and we have to agree—that age limits are by their nature inherently arbitrary and do not apply well to individual cases. There is nothing to suggest that the 18th birthday of a particular individual means that on the next day he or she will automatically be of more value to the business than when they were 17. This legislation will not change that. This legislation will still kick in once the youth turns 18. 
There are also some practical problems in the presumptions the legislation makes in relation to the 200-hour threshold and I would like to mention some of those. The first example is of a youth working for 200 hours for an employer thus qualifying for the adult rate. That is fine. The employer has had 200 hours to upskill the youth and the youth has had 200 hours to gain experience within that workplace to ensure that he or she is worth or may be worth the adult rate to the employer. I give another example of a youth who works for employer A for 50 hours changes jobs and works for employer B for 125 hours then again changes jobs and works for employer C for 25 hours. After working 25 hours for employer C the youth under this bill would qualify for the adult rate. Because the 200 hours accumulates over several employers and despite the youth having spent only 25 hours with employer C employer C still has to pay him or her the adult rate. That assumes—perhaps rightly perhaps wrongly—that the experience the youth has gained in previous employment is transferable to his or her latest employment. 
A third example is where a youth works 70 hours for employer A and over the same period works 130 hours for employer B. Having accumulated 200 hours work employer A and employer B both have to pay the youth the adult rate. The youth at that stage has a combined total of 200 hours. Again this assumes that the skills and experience in the two jobs are transferable—that they are equal—so that the youth is valuable enough to the employers to justify them paying him or her the adult rate. 
Finally I would like to add—and on this point we are in complete agreement with the Green Party which may be unusual and I quote from its minority report on the bill—that “this will add to the compliance burden for employers”. We are concerned about that. We are concerned about the collection of hours and about the value of the hours. If a youth is working for two employers at the same time—not exactly the same time obviously—then just because the 200 hours clicks over the youth is entitled to an adult rate notwithstanding the skills and experience involved. 
If this bill is to avoid exploitation and discrimination of young workers—and we do not condone exploitation and discrimination of young workers—then it should have been so framed. This bill risks pricing young people out of the labour market. It creates a perverse incentive for young people to leave school rather than boost their own skills and training. It fails to recognise that many employers already pay above the minimum wage to youths and it adds to the compliance costs of business. For those reasons National is opposed to the bill.