Upsize youth pay on the table
Youth Workers , the Unite! union’s SuperSizeMyPay.Com campaign and Sue Bradford all had a victory today when Sue’s Minimum Wage (Abolition of Age Discrimination) Amendment Bill, was drawn from among 30 others in the Member’s ballot today.
This bill makes Sue the Green MP with the most Bills drawn, with 3 bills now emerging from the Ballot - overtaking Nandor on two.
The Bill seeks to remove the legal discrimination against workers aged 16 and 17, through establishing equality in the minimum wage rate between this age group and other workers.
At present workers aged 16 and 17 years have a minimum pay rate of $7.60 an hour, while those 18 and over are paid a minimum of $9.50.
As Sue B says in the explanatory note to her Bill:
Such discrimination is arbitrary, inequitable and unjustifiable under the principle of equal pay for work of equal value.
Sue argues in her release a couple of days ago:
“There is no earthly reason why a 17 year-old filling cars with petrol at a service station or a 16 year-old retail assistant should be receiving nearly $2 an hour less than 18 year-olds working beside them doing exactly the same job. The work is the same, the employer expectation is the same, and the costs of food, clothing, transport and other essentials of life are the same whether you’re 16, 17 or 18 years old.�
“It is high time we ended this archaic discrimination between workers on the grounds of age – we did it for women, it’s about time we did it for young workers.�
It’s great that this debate will now extend from the workplaces and streets of New Zealand to Parliament. The first picket of Starbucks in the world was undertaken by the Unite! Union’s SuperSizeMyPay campaign in Auckland recently and now Parliament will have the opportunity to say: “Yeah, fair enough, such discrimination is arbitrary, inequitable and unjustifiable, and we are not going to support it anymore.”
Congrats to Unite! and the workers and activists who have begun this campaign. I am hopping about with joy and hope this Bill will help you end it equitably, justly and successfully.
And based on election promises and general rhetoric; Labour, New Zealand First and the Maori Parties should throw their support beind this Bill.
December 8th, 2005 at 4:01 pm
Alright. Go Sue B. Standing up for the minority voice time and again.
December 8th, 2005 at 6:16 pm
bloody hell she is so jammy, this is the first time she has put this bill in the ballot! But interesting that 90 MPs didn’t bother to lodge a Bill in the ballot. Don’t they want to change the world? What do we pay them for! I bet all 6 Green MPs entered Bills … didn’t they?
December 8th, 2005 at 7:03 pm
Yep, they sure did, Stuey. The ones in today’s ballot were:
Sue Bradford, Minimum Wage (Abolition of Age Discrimination) Amendment Bill;
Jeanette Fitzsimons, Resource Management (Climate Protection) Amendment Bill;
Sue Kedgley, Consumer’s Right to Know (Food Information) Bill;
Keith Locke, Head of State Referenda Bill;
Nandor Tanczos, Waste Minimisation (Solids) Bill; and
Metiria Turei, Misuse of Drugs (Medicinal Cannabis) Amendment Bill.
December 9th, 2005 at 1:33 am
Unfortunately the bill as it’s written is pretty inadequate. I’d be overjoyed if it was successful, and will be part of these campaigns.
But it doesn’t address the most fundamental problem - which is that those under 16 currently have no minimum wage protection. 15 year olds work in cafes, supermarkets, fast-food outlets, pizza places, doing the same job as someone over 18 and paid as little as $5 an hour.
December 9th, 2005 at 9:26 am
I am stunned at how economically illiterate the greens and socialists in general are. On the face it may seem good to have higher minimum youth rates, but the reality is that it can actually have a negative outcome as employment becomes unaffordable . Some employers would not be able to afford the higher rate, no job is offered, and therefore the person misses out on a job, and learning new skills as a result. The problem with the likes of Sue bradford is that they don’t employ the people on minimum wage, small businesses do.
I have a choice when looking to employ someone - at a certain point becuase of wages and compliance the costs outweigh the benefits.
For instance I have a friend who is an electrician, he is very busy - but will not employ someone to help because it is difficult to make the costs and compliance associated with employment pay a dividend. result - one person out there is missing out on picking up a job and learning new skills.
I have said it before and I repeat for your benefit - socialism is stupid and it does not work.
December 9th, 2005 at 9:48 am
I’m stunned by how Tories always think their economic views are commonsense, rather than simple the debatable issues that they really are.
If your electrician wants to employ someone for peanuts to make a profit, he should try a country that doesn’t give a shit about the poorest people. Last time I looked, electricians cost heaps so if he can’t turn a profit charging some kid out for that, and then paying them the minimum wage, he’s the economic ignoramus.
Unrestrained capitalism does work, but not for everyone.
December 9th, 2005 at 9:50 am
petermck: Compliance costs are a different issue, arguably the need to increase wages is an argument for reducing compliance costs.
Although its about the minimum wage generally rather than just youth rates, I refer you to David W Young’s Business column in this week’s Listener - http://www.listener.co.nz/default,5128.sm.
I suspect that you and I could take what we will from it to support our arguments. I’d point at the research that “suggested that the negative employment effects of raising the minimum wage were minimal”. You would point to to the research that “minimum wages significantly above the market equilibrium appear to have long-term side-effects like less worker training, fewer labour market skills and discouragement of school enrolment.”
Which shows that the argument is political, which in turn recommends Young’s conclusion that an independent minimum wage commission, a la the Higher Salaries Commission.
December 9th, 2005 at 10:00 am
petermck - how do you justify employing an 17 year old at $7.60 an hour to pump petrol when an 18 year old must be paid $9.50 for doing the same job (which is itself way too low, but that’s another matter)? It is simple age discrimination.
The arguments of the Right regarding minimum wages are well-known - their logical conclusion is to have no minimum wage at all, as Don Brash has advocated on occasion, and become a fully-fledged third world country.
The arguments of the Right that minimum wages result in lower employment levels don’t actually stand up to evidential scrutiny - studies in the US indicate that States that have a minimum wage higher than the Federal minimum actually have higher levels of both employment and employment growth than those with only the Federal minimum wage.
December 9th, 2005 at 10:35 am
I think it is you who is economically illiterate petermck, or at least illiterate of what empirical research has actually shown, as opposed to what your theories tell you to be true. Recent research has shown that when youth rates were eliminated for 17-18 year olds it had no impact on their employment and unemployment.
December 9th, 2005 at 10:53 am
You could just as well argue that with more money going into people’s pockets, this will result in more discretionary spending and hence more profits for local businesses. I believe that such a mechanism is used by right-wingers to justify tax cuts, I don’t see why wage increases wouldn’t have the same effect (and Ivan’s comment seems to support this).
On top of that, it is not your average local small business that we are talking about is it? The main businessess that pay low pay rates are multinational corporates where the profits go offshore.
December 9th, 2005 at 11:12 am
Hey, maia, think the Bill might just refer to 16 and 17 year olds at the moment because that gives it a better chance of getting referred to the Select Committee. You see, the age that the anti- age discrimination provisions of the Human Rights Act 1993 commence is 16. So political parties that might oppose it will have to counter arguments that their opposition is inconsistent with Human Rights legislation.
Of course, if it goes to Select Committee, then we can all make submissions that it should be extended to younger workers. I’m confident the Greens would support this. After all, they have policy to “Work towards the implementation in New Zealand legislation and government policy of the United Nations Convention on the Rights of the Child”.
Article 32 of the UNCROC states:
1. States Parties recognize the right of the child to be protected from economic exploitation and from performing any work that is likely to be hazardous or to interfere with the child’s education, or to be harmful to the child’s health or physical, mental, spiritual, moral or social development.
2. States Parties shall take legislative, administrative, social and educational measures to ensure the implementation of the present article. To this end, and having regard to the relevant provisions of other international instruments, States Parties shall in particular:
(a) Provide for a minimum age or minimum ages for admission to employment;
(b) Provide for appropriate regulation of the hours and conditions of employment;
(c) Provide for appropriate penalties or other sanctions to ensure the effective enforcement of the present article.
So I think restricting it to 16 or 17 at the moment is likely to be a tactical ploy to maximise the chances of getting it past first base to a Select Committee where submissions relating to the conditions of younger workers can be heard as well.
December 9th, 2005 at 1:41 pm
But the Human Rights Act is actually the fundamental problem section 30 (3) of the Human Rights Act reads:
“(2)Nothing in section 22(1)(b) of this Act shall prevent payment of a person at a lower rate than another person employed in the same or substantially similar circumstances where the lower rate is paid on the basis that the first-mentioned person has not attained a particular age, not exceeding 20 years of age ”
That’s where limits on discrimination in employment come in, at 20 not 16.
Don’t get me wrong, I’m glad the bill is out of the ballot, I just think it’s important we keep the current situation of 15 year olds front and centre.
December 9th, 2005 at 4:07 pm
nice to get a debate going - I can say one thing - where socialism is tried - it never works - theory may be fine, but practice is different. My preference would be to have no youth rate - (and no minimum wage) (I can hear screams already) - that way people will be able to negotiate a wage based on their economic contribution. for instance - I am happy to pay our nanny $17 an hour because my wife and I believe she is worth it - but that does not mean we would pay another nanny the same rate until she proved her worth.
The petrol pump attendant is an interesting point in case. If I owned a petrol station I may pay a youth the minimum rate - but once they proved themselves to have maturity they may get a pay rise - based on good performance of say up -selling, politness, service, presentation - all good skills that would be learnt at a young age. At 18 if they were good enough they could be managing the shift - having learnt the skills over the previous couple of years. Bradfords proposal may mean that same person would not get the job at all.
Why do you socialists have a problem with the market deciding what someone should be paid (especially for casual work which yoouth generally do). Have you thought that youth rates may actually hold people back? Do you think it is better they have no job ( with ability to learn important skills) rather than have a job pay $7.60 an hour. Having the opportunity to learn skills at a young age is in my view more important than the difference of a couple of $ per hour. By learing the right skills (eg an apprenticeship) means they in time could go on to earn much more money than they dreamed.
If I had the choice of employing a 16 yr old or a 18 yr old (all other things being equal) I would probably go for the 18 yr old if I was forced to pay them the same rate based on maturity that the 2 years difference would probably make.
You Greens have a diferent view of the world than us capitalists. Nothing I say - or you say would probably convince the other.
December 9th, 2005 at 4:59 pm
This bill doesn’t alter the laws around apprenticeships, it says so right in the Explanation. If you’re going to attack the Bill, first of all you should read it.
December 9th, 2005 at 5:37 pm
Petermck’s argument seems to assume that if minimum wages go up then employers will just not employ anyone, rather than employ somebody at the higher wage. But that is not true. If employers are rational agents (an assumption right wing economists are ready to make) then they will pay an employee a minimum wage provided they can make more profit from the employee’s labour than they pay out in wages, ACC, etc. Of course, if there is no minimum wage the employer can pay less than this and make more profit.
Currently, employers profits have risen higher than the rise in the minimum wage. So if the minimum wage rises to keep pace with employer’s profits then employers will keep paying the minimum wage. Of course if minimum wages rise so high that employers can make no profit at all from them, then the employers will not employ them. But nobody is proposing this; the Greens (and New Zealand First) policy of a $12 minimum wage is not excessive considering the vast profits companies have made, and the far lower wage increased enjoyed by staff.
It should also be remembered that over the last few years, minimum wages have risen consistently, and unemployment has consistently gone down. So nice theory, shame about the facts.
December 9th, 2005 at 5:55 pm
Often, the socialist argument seems to be the same as the shoplifter’s. “The [place] makes plenty of profit, they can spare some.” What they fail to see is how the store will cope with extra costs. If businesses are suddenly faced with higher prices, the most logical thing to do with be to pass on the costs to the consumer. You can’t just take everything out of the profit margin. This means costs rise approximately equivelant to the wages, creating inflation. So, for the price of a mixture of inflation and employment, we might get some extra equality. This isn’t good for anyone, except for perhaps a small subset of low skilled workers.
December 9th, 2005 at 5:59 pm
I think I’m primarilary adressing this comment to PeterMck
In an ideal world, companies would pay their workers as much as they could afford to do so, and in a world that looked like that the concept of a minimum wage would be ludicrous, as would unions and loads of other bull. There have even been companies that started with that ideal, HP and McDonalds spring to mind. Unfortunately, in general reality, the question of employment comes down to how little an employer can (or is willing to) pay.
The vey concept of a competitive business (which is good) is competition. Unfortunately, competition usually comes down to “how little can I pay my staff” which looks good for the business owner. But what goes around comes around, and thats why his customers cant afford his products. Minimum wage breaks the downward spiral, albeit at a cost.
In my opinion, if a company can only afford to pay a substantive proportion of its workers on a long term basis at minimum wage then that company is not a a very viable company, its on the subsitance level waiting to fail. If the majority of the employees are on “low” wages and those in the upper echelons are collecting much money, then that failure is (again in my opinion) deserved.
Ratio of highest to lowest remuneration is an interesting meaure and should be required reporting.
December 9th, 2005 at 6:28 pm
Petermck - It is astonishing how deluded and underinformed most capitalists are - as though consumers with no money to spend will somehow sh^t some in order to buy whatever it is they happen to be flogging at the moment.
The “ownership society” mantra that has been so popular in the USA has brought the US to a bimodal distribution of wealth. There are likely to be a million jobs lost over the next 12 months there, and the wage earners PAYE battlers will be the main casualties in the class war that the wealthy won back when Raygun was elected. There are two classes in the US now, owners and peons, and the “golden shower” that the latter have been experiencing of late, has not been in any sense metallic.
We’ve seen what unrestricted capitalism does and how it fails, and we aren’t having any of it. We know what uncontrolled communism does and how IT fails and we will have none of that either.
We don’t have any problem at ALL with paying people what they are worth in the main, but the minimum wage is not going to affect the rewarding of merit. That happens, and in the market as it stands there’s no shortage of jobs, there is a shortage of WORKERS.
Don’t you get the relationship? That’s the market speaking and it is saying that workers have to reap some of the rewards or they’ll just withold their labour. Capitalist principles at work, but you’re happy to deny them in order to improve on an already better profit margin… Taking advantage of inexperienced youth to get cheap labour is the basic game. The kids aren’t able to say “no, that’s not enough” because they want that first job, but I know what happened when I was working like that, and I wonder sometimes if that isn’t part of why I am here.
That’s what we know about Capitalists. They are never happy with enough.
BJ
December 9th, 2005 at 6:40 pm
Increasing the minimum wage will not somehow create a higher wage economy. Possibly nominally, but a high wage economy is not created out of artificial barriers. People have to be in work that actually merits the high wages, and a higher minimum wage will do the opposite. If unskilled work pays an equilbrium price which is very low, it incentives people to get more skilled out of necessity. However, if the unskilled work is now on a minimum wage much higher than the equilibrium price, it is now much more attractive. Why get skilled when you can work on minimum wage? So, for any effects, positive or negative, minimum wage will have, a high (real) wage economy certainly isn’t one of them.
December 9th, 2005 at 8:19 pm
…US to a bimodal distribution of wealth
BJ, thats a much more polite version of one of my sayings, namely that the alternative to the American Dream is jail…
December 9th, 2005 at 11:58 pm
The invisible hand also kills.
“You don’t eat the American Dream… it… eats… you” - from “Odds Bodkins”, a political comic of the Seventies in San Francisco.
Nichlemn - Increasing the minimum wage does however, distribute the wealth a bit. It does NOT impose an artificial barrier to achieving wealth. NOR is a “high wage” economy the case anywhere anymore or a necessarily desireable goal. The USA used to be that, but real wages have been dropping for years. You can’t build a high wage economy at all when the global workforce is as large and accessible as it is. I think we should examine this “goal” a bit.
What do we mean by “High Wage”? This isn’t a real time medium so I will have to wait to hear your answer to go much further. My initial inclination is that it means that we ALL have a great deal more disposable income at our fingertips, much as the USA has had for the past few decades. We produce complex goods for export and get back wads of foreign money in payment? like the USA does?… except that isn’t what’s been going on in the USA, IS it? Does a debt of over 12 Trillion dollars ring a bell anywhere? Those aren’t “wages” those are debts. Won’t likely be repaid ever, but that’s a problem for our children…
Your point about skills is interesting too, as skilled labour is in high demand and is reasonably well compensated here. You mean that people would rather just work for minimum wage because it is so high - $12/hr - 40 hr week = $480. My family eats $300 of groceries in a week and there are child labour laws to keep my 2 year old out of the work force. So it really doesn’t work out for me not to be skilled, does it… and I am really lucky too, because I am VERY skilled, and paid as well as the company can afford to pay me. Yes it IS less than in the USA, even if the NZ$ were at parity with the US$ it is less, and the taxes are higher, but I’d rather be here.
I am aware too, that not everyone is capable of doing the things I do, no matter how hard they study. The average person is average smart and can upskill enough to get appreciably more than minimums. The bottom of the bell curve however, is not able to do anything whatsoever about their position. I know you would rather they just “went away” but actually paying them a bare living wage for their work and a lot of them work harder and more honestly than the smarter folks, is just good public policy. They WILL buy things too… not the same things that Bill Gates might buy but then, they won’t have been convicted of monopolistic practices on 3 continents either.
There’s more to it than that too, and you well know it. The lower decile schools have a hard time educating kids who come from those poor homes. There’s nutrition issues and resource issues in the homes and it just isn’t nice to have to grow up being that far behind the power curve. It is even WORSE to have to deal with the educational and social disadvantages that the school made up of poor people’s kids provides. Maybe we can fix those schools up enough to really level the playing field, and MAYBE it makes sense to simply equalize the available resources at home a little more.
You’d be happy to pay people less than subsistence, yes? and you are quite unhappy to make life liveable for them. However that sort of society breeds trouble along with poverty, and we don’t want it. Your “high wages” come with a high price tag.
BJ
December 10th, 2005 at 4:37 pm
Well, I’m basically attacking Winston Peters here. He claims that raising the minimum wage to $12 will help create a “High Wage” economy in New Zealand.
Consider teenagers that are able to drop out of school. Some will always drop out of school, some will never drop out. But there will be a certain amount who are wavering, and an increase in the minimum wage will be sufficient to make them drop out, as opposed to staying in school. This can occur by other means but it is best not to push it.
Also, note New Zealand does not exist in a vacuum. When the minimum increases, businesses will have higher labour costs they must pass on in some way. If unskilled work is being far overpaid in a country, there is a large incentive to move elsewhere. You may call it “exploitation” but in reality, unskilled work has always been overpaid. They don’t deserve a reasonably quality of life by Western standards if they are simply not worth it. When there is a huge supply of people willing to work for a lot less, it may seem “unfair” to have to stoop to their level. But of course they’d feel that way. If I was getting paid $50 an hour in a McDonalds due to artificial controls, but some people were easily willing to do it for $10, I should accept that my standard of living has simply been inflated far beyond what it should have been. Of course, I’d probably just bitch about it. But consider the morality behind trying to protect my job.
Preventing work from being outsourced to try to save jobs would be similar to 10 doctors going off and killing the other 90 doctors to try to make more money by reducing the supply of them. Whenever we impose minimum wages significantly beyond the world equilibrium and introduce trade barriers, it’s “killing” the people who are willing to work for less to improve the outcomes of the fortunate people who are still working. Yes, this helps improve outcomes of the unskilled people in that country - but for what cost? The detriment of the rest of the world, for instead of working for low wages can’t work at all. It’s one of my biggest beefs with nationalism: appeasing your constituency at the cost of the rest of the world.
“It is astonishing how deluded and underinformed most capitalists are”
Now, now, that doesn’t get you any points at all. By attacking people, and not rationally debating ideas, you’re not doing yourself any favours. I could go and rant about how “You Greenies know nothing about economics, your arguments are incredibly flawed, it’s just a waste of time trying to convince you idiots.” I know that regardless of what I say, I’m not going to convince you - and you probably won’t convince me either. This is because politics are about core values that cannot be debated away.
December 10th, 2005 at 7:44 pm
Nichlemn - In that case I owe you an apology. Winston is wrong about what he’ll accomplish and wrong to want to accomplish it in any case. Still, I don’t know what the heck he’s on about either… I accepted that $12 per hour doesn’t make a high wage society and in some ways ridiculed the idea myself… unfortunately thinking it was your idea in the process.
Is NZ $12 a fair minimum wage or is it too much? Is it a LOT too much? What of other countries that have minimums? You have me curious.
These guys do the US pretty well. Never mind the opinions just the inflation adjusted wage law.
http://members.fortunecity.com/multi19/pay.htm#int
-and this is a listing by country along with a summary discussion.
http://en.wikipedia.org/wiki/Minimum_wage#Worldwide_minimum_wages
So it looks as though it ($12) is comparatively generous but not more than about 25% above the typical and not the highest on the planet. Would you agree with that reading of the data?
With respect to the capitalist line, did you not recognize petermcks line being thrown back ? I should have directed it at him specifically perhaps…
OK.. so what happens if WE have a high minimum wage. Remembering our isolation.
Unskilled labour becomes more expensive.
People who might be tempted to drop out of school - do so in order to take an unskilled job at min wage…
People who might be tempted to drop out of school - cannot do so because there are fewer unskilled jobs available…
Products depending on unskilled labour are more expensive.
Automation is used as a substitute for unskilled labour more often.
People in poorer regions have more money (maybe, as there may be countervailing effects on benefits and taxes) reducing the effects of unequal wealth on the education of their children.
- feel free to add something I miss…
Preventing outsourcing is not like killing the other doctors to create a scarcity of doctors. The demand for unskilled labor isn’t that portable. People who do it aren’t able to travel to NZ from India to do it, and for example, picking fruit here from India simply isn’t possible. I think the outsourcing issue has to be argued separately from the min-wage issues.
As for introducing trade barriers, my first reaction is ??? What’s that got to do with the argument… but then there is not likely to be much reason to do more than let the cost of the distance take its toll. I assume that you reckon that these are required to separate our markets from those which are run without min wages?
We can’t save the rest of the world Nichlemn, it is already at 3x its carrying capacity IMHO, and allowing ourselves to be buried with them because we feel obligated to bind ourselves to the mast of their sinking ship, is not survival positive for the species as a whole.
I can’t continue this at present, have to scoot… and I am not really finished with the research
respectfully
BJ
December 11th, 2005 at 9:57 pm
The gas station attendant example finds particular credence with me, as that was my employment during my years as a student in the 90s. As I recall, back then, I got paid about $35 for working all of Saturday, and the same for Sunday. Often I was in sole charge of the gas station AND it’s adjacent rental car company. It was a particularly poignant feeling to turn over several thousands of dollars each day, sometimes as much at $10,000, and reflect that I got $35 of that, when I was the only person working at all.
Sure, the owners set it up and took all the risk, and all power to them. But it did feel a little exploitative that I was making them all that money with my labour, and getting so little of it. I’m sure that it wouldn’t have hurt them that badly to pay a little bit more, particularly when they were indiscreet enough to let me know how much of that turnover was profit. If the minimum wage forced a pay rise for people like me (then), I wouldn’t be complaining. Perhaps they’d have been squeezed and I’d have lost my job, but I doubt it. It’s pretty hard to cut staff when there’s only one of me. And I knew they were milking it bigtime, as all the money went right through my hands. You really get a sense of it when you’re stuffing huge fat rolls of someone else’s cash into their safe 5 times a day.
Ultimately I did lose the job anyway. The boss’s son quit school and needed work. I hope he got more than the minimum wage.
February 20th, 2006 at 12:56 am
[…] As reported on frog Sue Bradford’s Minimum Wage (Abolition of Age Discrimination) Amendment Bill got drawn from the ballot today. That’s the best bloody news I’ve heard in ages. […]