Tuesday 23 February 2010

Youth minimum wages - update

Sir Roger Douglas's bill that would again allow the youth minimum wage to diverge from the adult minimum wage has been drawn from the ballot. So Parliament will get to discuss whether it's a good idea to keep pricing inexperienced workers out of the market. I wonder whether National will support the legislation. I do hope so; it looks likely that the abolition of the differential youth minimum wage explains a big chunk of the increase in the youth unemployment rate relative to the adult unemployment rate. Sir Roger's bill would only allow that future minimum wage reviews be permitted to set differential rates - it wouldn't immediately cut the youth minimum wage. So it can't be expected to have any substantial effect on youth unemployment rates for years. But it would be a step in the right direction.

The text of the legislation is here.


  1. It could have a more immediate impact if the Government took the opportunity to lower the rates for youth significantly.

    If they are unwilling to do that, little is gained by making that the substance of the Bill. If they are willing to do that, then they are still free to do so.

  2. Oh, I'm not disagreeing. I'm just hoping that folks don't get their hopes up about an immediate drop in the unemployment rate.