Monday 29 November 2010


Former National Party Leader Don Brash lists some of the ways National has disappointed us under Key. Among the disappointments are National's failure to split the youth minimum wage from the adult rate.
I worry that, despite knowing that the Labour Government's abolition of the youth minimum wage has very substantially increased youth unemployment - by 12,000 according to Canterbury University economics professor Eric Crampton - we have taken no action (indeed, we voted against Roger Douglas's Bill to reinstate the youth minimum wage), so that thousands and thousands of young people leave school or training and quickly become demoralized, deprived of the opportunity to support themselves, with all the social and personal harm that does.
The full Orewa speech is here.

Brash would have been referencing my post from May on the December 2009 Quarter results. The latest ones have it around 8500; unemployment's turned around a bit.

I'd warn that, besides my being Senior Lecturer rather than Prof (though I'd be happy if Don Brash were to have a quiet word with his former employee, and my current employer, Rod Carr, about this), my numbers here are still back-of-the-envelope. They're backed out from the residuals of a very simple regression plotting the youth unemployment rate as a function of the adult unemployment rate: the residual spiked up abnormally following the abolition of the youth minimum wage.

If it were a murder mystery, the residual plot would be the smoking gun. The youth minimum wage would be standing beside it all shifty-eyed and having had both motive and opportunity. It would be worth a bit more detective work. But no jury in the land would convict that charismatic and popular minimum wage, no matter what the evidence showed; worse, the judge is in cahoots with the Mob.

Update: Liberation analyzes Brash's speech.

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