The new youth rates will be set at 80% of the adult minimum wage (currently $13.50) which will apply for the first six months of a job. It is not limited to a first job, so conceivably a young person could be on this wage multiple times. While the government claims that it is voluntary, the reality in the workplace is that in this environment of high unemployment. Workers get no choice. The areas of work that this would apply i.e. fast food, supermarkets, retail etc. have an excess of people looking for work, demonstrated by the queues of thousands who line up to apply for a job every time a new supermarket is opened. It is estimated that 40,000 young people will be “eligible”/affected.
According to the spokesperson of the New Zealand Retailers Association Louise Evans McDonald 71% of their members supported the reintroduction of youth rates when they were surveyed in 2011. Something which is unsurprising considering that for retail in particular wage costs are a large part of their operating costs. However when reading through the associations own 2011-12 Retail Market Summary they list a 31% increase in sales volume since 2004 compared to inflation of 22%, so retail isn’t exactly suffering in the current financial climate, any decrease in workers’ pay is purely going towards increasing profits.
Gilbert Peterson, Communications Manager for the Employers and Manufacturers Association (EMA) was more honest with his appraisal of the new rates, acknowledging that they are “not a very high rate of pay” yet counterpoising that with the view that “most young people were not supporting children or spouses”, (notably the Prime Ministers chief advisor recently pointed out in a speech to the EMA national conference that New Zealand has one of the highest rates of teenage pregnancy in the developed world.)
Putting those points aside Sue Bradford, whose private members bill abolished youth rates six years ago, has pointed out that “This is not about new jobs. It is about pressing labour costs down as far as possible to maximise business profits.” It is no coincidence that we are seeing welfare attacks being rolled out in tandem with attacks on work conditions. As much as the attacks are about making life on the various benefits as difficult as possible, it is also about sending a message out to the wider population, that this is what is in store if you lose your job, whether for standing up for your work rights or not putting up with harassment/bullying in the workplace.
The signal that the youth rate sends is that there are unemployed young people able to employed at a lower cost than currently employed adults. Because the reality is that there is no discussion of young people taking over skilled engineering jobs or airline pilots roles. It is the low-skilled, service sector of the economy that this is aimed at, where the differentiation between younger and older workers is now, primarily, that the younger workers can be (and will be) paid less. Within a wider perspective this is all part of a package of attacks that came to a head in the 1980’s. As a result of these attacks Mike Treen, National Director of UNITE Union has estimated from official statistics that the difference in real pay in 2008 compared to 1982 was $18 billion dollars a year. That’s $18 billion less that we’re being paid and $18 billion more that the employers are making compared to then. Youth rates are not an isolated attack.
In a move that appears to be a straight forward subsidy of employers, Kay Brereton, a spokesperson of the Beneficiary Advocacy Federation has outlined that if an 18 year old worker is paid $10.80 for 20 hours as opposed to $13.50 they would be eligible for a partial benefit of $75.60, a difference of $37.60. The employer saves $55 and the worker is $6.64 worse off. That’s if they know they are eligible for a partial benefit at all.
Worryingly the current policy rollout goes all the way up to 19 year olds (who have come off a benefit or are on an apprenticeship scheme). Redefining the concept of a teenager and of ‘youth’. The youth wings of both the ACT and National parties came out strongly against the proposal to raise the drinking age with Sean Wallis NZ Vice-President of the Young Nationals stating:
“At its most simplest form, if we deem 18 and 19 year olds old enough to move away from home, take a student loan out or start to learn a trade, manage their power, rent, internet, groceries and so on, surely they’re old enough to manage their own drinking habits?”
And yet this responsibility doesn’t come back to being treated with the basic respect and dignity involved in paying the same for working the same job. The same arguments were raised at the time when it was being argued that women should be paid less than men. The logic is still the same.
Labour have come out strongly against this change arguing for the idea of ‘same work, same pay’ and yet their legislation, which was a watered down version of Sue Bradford’s anti-youth rates bill, brought in a requirement that young workers would have to work 200 hours in a role before being paid full rates. The reality being that in an un-unionised workplace where there is often little oversight or information for young people in these situations, the abuse can go on unchecked. Employers like McDonalds and KFC don’t pay youth rates, even though they employ a large number of young people. But that is no act of generosity. The campaign to smash youth rates was a leading part of the Super Size My Pay campaign run by UNITE Union in 2005 involving thousands of young workers and students. Right now the difference for young people over whether they will be paid youth or adult rates is whether they are part of a union. The campaign to end youth rates was fought in and outside the workplace, not in parliament.
Recently as reported in the Kapiti Observer, John Key visited a WelTec training construction site in Otaki. He was challenged by carpentry student Brozon Richards about youth rates “He said it’s only six months,” Brozon said. “I don’t want to work for $10.80, I won’t work for $10.80.”