Employers welcome return of youth rates

EMA employment services manager David Lowe

Employers say the return of youth rates gives them the incentive they need to employ inexperienced workers. 

Under a new plan announced today, which the government calls a "starting-out wage", young workers can be paid at least 80% of the minimum adult wage.

Employers can use the scheme for:

  •  16 and 17 year olds in their first six months with a new employer.
  •  18 and 19 year olds starting work after more than six months on a benefit.
  •  16 to 19 year olds working in a recognised industry training course involving at least 40 credits a year.

Employers and manufacturer's association employment services manager David Lowe told NBR ONLINE it was fine when youth rates were abolished in 2008 because there were plenty of jobs for anyone who wanted one.

Now employers need an incentive to hire a less experienced worker.

"Young people leaving school with limited qualifications are competing for jobs with experienced older people."

Mr Lowe says while the savings in wages may not offset the issues associated with hiring young and inexperienced workers, it is a "helpful start" for employers.

"There's no silver bullet to this, and everyone who cares about youth unemployment should be celebrating."

The new scheme is due to come into force from April 1, 2013. 

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14 Comments & Questions

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Again our employers demonstrate that their greed is only exceeded by their stupidity

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Its so hard to believe a comment like this one. No-one owes you a thing, absolutely no-one. You would sooner condemn our youth to the family couch instead of getting them started on their working lives.

This is a brilliant move, learn work habits, skills, meet future employers, enjoy workmates, build self esteem, money skills and independence.

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Silly comment given the casualisation of labour means most of these guys will be the first to be laid off the moment sales and profits start to shrink.

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If you were on the dole, and had been on it for some time, do you think that reducing the amount of money that you would get if you were to start working will actually entice you to get off the couch and start working? Or would it do the opposite?

I am sure that many of those who are on the dole will assess whether to start working or not, first and foremost, on the basis of how much more money they will get per week (vis a vis the weekly dole they are currently getting), if they were to take up working.

Yes, motivating employers to want to provide jobs to those who have been on the dole is a good idea, however doing it at the expense of motivating the potential beneficiary employee is not. If the beneficiary doesn't want to work then the supposed new job opportunities that this policy is claiming to create may as well not exist.

In any case, the kinds of jobs that the policy is aimed at are unskilled jobs and are often diffacult to fill.

Also, dont forget that this policy applies to youth workers too, workers who only recently managed to achieve the abolition of youth worker rates. This policy smacks of National making good on a promise to business to correct the cost impact of parity pay for youth workers.

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I agree. If the wages that come with employment are an attractive enough incentive (ie are higher not lower) to a beneficiary then like all/most people they would be more likely to work as doing so will afford a better lifestyle than the status quo of remaining on the benefit. In which case the minor saving (20 percent discount on the minimum wage) that some employers may pocke under this National policy will be dwarfed by the much larger saving to all taxpayers that is created by actually getting beneficaries into work.

Could any person that is pro this policy honestly say that (presuming that an inate desire to work is not part of the equasion as is the case with many long term beneficaries), they would actually be willing to join the workforce for the first time in years if the difference between the money they recieve on the dole and the money they would recieve if working was reduced significantly?

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one step forwards and fifteen steps backwards .. that's what you get for voting in a bunch of slightly ignorant, politically naive and economically stupid farmers....bring on the next election these boys need to be exited

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wow now we can compete with other 3rd world nations.. Awesome national.....

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The "starting out wage" is a step in the right direction as its more about providing scale for both employers and employees. Young people need to be given every opportunity available to enter the work force without the competition from more experienced workers who demand the higher rate. The establishment of a youth rate should provide more employment opportunities for younger people.

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The quality of these comments indicates that the commentators are not paying subscribers to NBR Online.

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Wonderful example, as Key goes about ordering new ministerial BMWs.

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Open your blinkers - Labour set up this scheme as they wasted the gains of the 00's with a burgeoning and ineffective public service, election bribes and making the middle class beneficiaries with WFF.

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artifically tweaking wages is never going to be sustainable. Might investing in apprenticeship schemes and up-skilling be a better idea? Just check out various essential trades with a view to demographics.... a youth wage is really a band-aid on a knife wound

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