Fenton Darien: Minimum Wage (Starting-out Wage) Amendment Bill — Second Reading 
Text is incorporated into the Bound Volume 
Fenton Darien: Minimum Wage (Starting-out Wage) Amendment Bill — Second Reading 
[Sitting date: 14 March 2013. Volume:688;Page:8580. Text is incorporated into the Bound Volume.] 
DARIEN FENTON (Labour) 
: 
 Well I do not think there is anything for that Government to be congratulating itself on when the time frame for the submissions on this Minimum Wage (Starting-out Wage) Amendment Bill has been shortened. When we are considering something as important as cutting workers’ pay the least the Government could have done was give the normal period of time and not rush it through the Christmas period when people did not have the chance to make submissions. Needless to say there were more than 500 submissions—531 actually—received on this bill of which 522 were opposed; only nine were in favour. The reason for that is that this bill is going to put young workers back on the scrap heap of youth minimum wages. It is the economic failure of this Government and it is putting its failures squarely on the shoulders of our young people. 
This bill reinstates youth rates not only for 16 and 17-year-olds but also for 18 and 19-year-olds—something we have not seen in New Zealand since last century. Rather than making bold plans to tackle the urgent crisis of youth unemployment—27000 under-20-year-olds are not in employment education or training—the Prime Minister and the Government have once again demonstrated their contempt for young people and also the fact that they have no ideas. This bill is based on the flawed idea that cutting wages is a way to grow jobs; it is a tried and failed policy of last century. 
We all know that there is a problem. No one is denying that. There is a national crisis in youth unemployment. But we do not agree that cutting wages for 16 and 17-year-olds or 18 and 19-year-olds who have been on a benefit for 6 months will make the difference that is needed. Cutting wages and making workers easier to fire as this Government has been doing has not created jobs in the past for young people and is not creating jobs now. There are now 90000 young people out of work education and training. That is an increase of more than 10000 in the last year alone and that is shameful. That is despite the fact that Government members get up every time they have the opportunity and boast about the 90-day trial period. It has done nothing. It has done nothing to help youth unemployment. I find it very astonishing that the Prime Minister admits he could not live on the minimum wage of $13.50 an hour—soon to go up by a paltry 25c an hour—and as he admits at the same time he still expects young people young 16 to 19-year-olds to live on something like $10.80 or $10.90 an hour. 
What young people need is hope. They need hope and the skills to succeed in the job market and achieve higher incomes and better jobs. Creating a high-skill high-wage economy is the way to go about this to give our kids hope for the future not cutting pay. We all know that the next generation of this country is hollowed out. Numbers of our kids are getting on the plane for Oz. Numbers are already saving up their airfare to go to Australia because they know that even there where there is a youth minimum wage it is going to be a lot higher than here. But this Government does not listen it did not listen to the submitters and it just blunders blindly on. 
You know what was interesting during the submissions was that even employers were less than enthusiastic about sub-minimum wages. In a survey done by the Ministry of Business Innovation and Employment last year it found “a key theme arising from the quantitative interviews was a lack of incentive that reducing the cost of labour or wage rates was for employers in hiring staff or filling vacancies. In fact only a small number of employers suggested reintroducing youth minimum wages would improve their likelihood of employing 16 and 17-year-olds.” The employers are saying that they are not going use this so it is going to fail in its aim of cutting youth unemployment. The Employers and Manufacturers Association submission was interesting. It told the select committee that cutting youth pay is not a silver bullet and that there needs to be a whole range of measures of changes rather than this single one-eyed approach. 
The fundamental question that goes to the heart of this bill however is whether it is fair or right to pay workers less because of their age—to discriminate against them. The implication of this bill is that the work of younger workers is of lesser value than that of older workers it perpetuates its stereotype of young workers as being unreliable and incapable and it ignores the fact that many young workers have already had considerable work experience at the age of 16. 
Many people who support youth rates say that young workers need more training and support when they start a new job. But that same logic applies to anyone who starts a new job. There was a time in this country when people said the same about women and indeed Maori. They said they were worth less because they were women and because they were Maori. In fact up until the early 1970s women on the minimum wage were paid less than men. In the early 20th century Maori were paid less than other workers. No one today would imagine tolerating that type of discrimination but here we have the Minimum Wage (Starting-out Wage) Amendment Bill which perpetuates discrimination on the basis of age. We cannot discriminate against older people. We cannot discriminate against people on the basis of being older. Some argue that older workers are less productive yet there is no age-based minimum for them. 
As I said at the beginning this bill will not achieve its aim. It will not deliver on its stated aim of reducing youth unemployment. The regulatory impact statement which was very interesting said that “the precise nature and extent of the policy’s expected benefits are uncertain.” All the Ministry of Business Innovation and Employment could do was guess. And its best guess is that this bill will create only 400 to 1100 net new jobs. Even if true and that is taking into account the displacement that will occur for older workers this is only a drop in the bucket compared with the 250000 sixteen to 19-year-olds in New Zealand. Even those figures have to be treated with extreme caution. The Ministry of Business Innovation and Employment said it cannot project the impact of the policy. It cannot tell us that this policy will work. It cannot do it with any accuracy and it was quite explicit that it did not have the information it needed to make a credible estimate. 
Despite the Minister claiming that youth rates are voluntary and that workers do not have to accept sub-minimum wages under this bill if they do not accept a job—these are 18 and 19-year-olds who have been on a benefit and let us remember we are not talking just about the unemployment benefit here we are talking about sickness and invalids benefits—and Work and Income judges it to have been a suitable job they have to be stood down. They can be stood down from any support from Work and Income for 13 weeks. Poor young worker gets out of bed having been sick or having been injured manages to apply for a job and then— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Order! I am sorry to interrupt the member. [ 
Interruption 
] No I am on my feet. The interjections across the benches are unacceptable. I want to hear what the member is saying. If there are interjections they should be on what the speaker is saying and not this other dialogue that is going on. 
DARIEN FENTON 
: As I was saying the poor young worker who drags himself out of bed having been on a sickness benefit or an invalids benefit has to accept a job at sub-minimum wages or he will be stood down with nothing from Work and Income for 13 weeks. What is fair about that? 
Cutting young people’s pay is just the tip of the iceberg of this Government because of course we know that changes to the labour laws including meal breaks and rest breaks are on their way. 
Hon Simon Bridges 
: You bet they are. You bet they are. 
DARIEN FENTON 
: Yes you bet they are. 
Hon Simon Bridges 
: Then why’d you put out that press release? 
DARIEN FENTON 
: Because I was hoping the Minister of Labour would show some sense unlike his predecessor because that is a stupid bill. This is all going to hit Kiwi workers across the board but this bill in particular is going to hit young workers. It is going to make it much more difficult for them to survive. It is not going to make it easier for them to get work. The Minister’s own department could not verify that the aim of this bill of cutting youth unemployment would be delivered. So it is a bill that just goes back to the tradition of the National Party—back to the 1990s. Let us cut people’s pay. It does not work. It did not work then and it will not work now.