Minimum Wage (New Entrants) Amendment Bill

This is the purpose clause of the Minimum Wage (New Entrants) Amendment Bill, but it obviously also includes certain criteria, and, whilst not straying from talking about clause 3, that naturally means I will have to also talk about the criteria. The purpose of the legislation is to amend the principal Act, which, as we know, is the Minimum Wage Act, to expressly provide for a minimum rate of wages to be prescribed for new entrants, being workers who are 16 or 17 years of age and who meet certain criteria. This is not a huge bill, but the criteria, I think, are very important.

The criteria include such items as the length of employment, whether that employment has been with one or more employers, and the position held by the worker. That basically says it all. Nothing about how many hours of work is mentioned in the bill’s criteria, although the commentary on the bill suggests a figure of 200 hours of employment on or after an employee’s 16th birthday, unless that 16 or 17-year-old is employed in a supervisory position. The minimum rate, as I think has been mentioned, is set at 80 percent of the adult minimum wage.

I state from the outset in relation to this purpose—and I restate—that we believe that all workers, whatever their age, should be valued for the work they perform. No worker should be exploited because of age or for any other reason. But we are concerned about the criteria—and we share the concern of some of the submitters—that this bill will only raise the cost of hiring young workers. It will not actually increase their productivity, and, as I tried to mention in my address in relation to the title, it may have an adverse effect on the employment and training of young workers. It may be a barrier to them entering the workforce and it may, indeed, tempt or encourage them to leave school and forgo their education or trade skill training for a job that is paid at, or above, the adult minimum wage.

I say in relation to the criteria that I see no reason at all why a 16-year-old would not be paid at the same, or similar, rate to a 19-year-old, a 25-year-old, or, for that matter, a 40-year-old if he or she does the same work and makes the same contribution. But, as one submitter said: “Younger people tend to be paid at a lower rate than older workers because age is a proxy for experience and performance on the job, just as the age of 15 is a proxy for the minimum capacity and maturity required to drive a car on our roads.” Legislation like this, whatever its purpose, cannot change overnight the amount of experience and performance capabilities of any worker, whatever his or her age.

To paraphrase a useful quote—and again, it is in relation to the purpose—”What good does it do a young person to know that an employer must pay him or her the adult minimum wage if the fact that he or she must be paid that amount is what keeps him or her from getting a job.” I think that sums up a lot of our worries and concerns about this bill and its purpose, that it will indeed be a barrier and not help the employment of young people.

Sitting suspended from 6 p.m. to 7.30 p.m.

The National Party was quite struck that the purpose of the bill is to amend the Minimum Wage Act 1983 to end age discrimination in employment by removing the ability of the Governor-General to set, by Order in Council, minimum wage rates defined by reference to the age of workers, amongst other things. I would be quite keen to hear the matter discussed in more detail, if the honourable member Sue Bradford would like to take a call.

The National Party has huge concerns about the ending of age discrimination in respect of young people in smaller towns. I heard some of the submissions and arguments made about places like fast-food restaurants in small towns where people are working next to each other, doing the same job, but are paid differently because they are different ages. To be honest, some of what they said made sense, and when we heard from the young people themselves we were moved by their stories and agreed they were doing exactly the same job.

The concern I have has also been expressed by other members on this side of the Chamber when we have discussed this bill at length. We have not made our decision lightly, because it affects young people. Obviously, in the National Party we agree that people should be paid what they are worth. There is no question about that.

We could give the example of Levin, a small place that has mechanics, hairdressers, small businesses, and small retailers. They often take on someone from school to give that person a go. Those businesses do not have much money, or much fat. They do not take on that young person to make the business some money, or even really for that person to have a huge input into the business at that time, but they see the benefit for the longer term of taking on that person. The businesses may be strapped for cash and not making a lot, but by paying the minimum wage rate, they can take on a young person.

For example, I have a dear friend in Taupō who owns a hair salon. She takes on someone from school, on late nights on Thursdays and Saturday mornings. She said that, to be honest, the young person sweeps a few floors and does not really do much, but it gives that young person a taste for the industry. It takes a huge commitment to train as a hairdresser. Trainee hairdressers work for a long time for only a little money, in the hope that the qualification will lead to something worthwhile. My friend said that it is a huge commitment to undertake.

The purpose of the bill is to remove age discrimination. The National Party has huge concerns that the bill actually discriminates against young people, because small businesses in smaller towns cannot afford to give young people a go if they have to pay them adult rates. Those young people will end up in jobs in bigger places, in supermarkets and so on, and although there is nothing wrong with that, it does not give them a taste of what they are hoping their future career might be.

We heard another good example of a veterinarian who takes on young people—and I raise this in terms of the purpose of the bill, to cut out age discrimination. That veterinarian takes on young people, after school, but can afford to pay only the minimum wage. The veterinarian cannot afford to pay them more than the minimum wage and does not want to pay them nothing, so takes them on at the minimum wage. A young person in that situation is rapt, quite frankly. The person is getting a go, and having an opportunity that would not arise otherwise.

These small businesses said that they knew the worth of what they are doing for young people. I wonder whether the bill has been as well-thought-out as it could have been in that respect.

I say to the member in the chair, Sue Bradford, that we understand some of the bigger problems, and perhaps why she has brought in the bill. We do not always agree with other members, but that is the nature of this place, and that is OK. We can argue about it. But I do have huge concerns about whether those smaller areas have been thought about—areas where there are not as many employment opportunities for those young people. Those small businesses are almost doing a community service by taking on these people. They are quite open about the fact they cannot afford to pay anything more than the minimum wage, but they know it may help those young people with career opportunities later on. That is really important.

I have personally had people write to me, and National has had many people meet with us. They range from veterinarians, to hairdressers, mechanics, panel beaters, and many others. Kids working for these businesses are looking for a bit of a break and a taste of the work, so they can see whether that area suits them.

💬 Sue Moroney: Talk about clause 3.

I have been talking about the purpose clause, and we hear moans and groans from members on the other side of the Chamber, because that is what they like to do. I do not believe that any member of the House wants people not to be paid what they are worth. That is the truth of it.

The member from National Paula Bennett has inspired me to speak because, first of all, I would like to respond to her comments. Young people in smaller towns, if not older people, are actually worth the same for the job they do, wherever they happen to live in the country, unless one is proposing a policy that says we should discriminate in wages on the basis of where one lives, which I would find an extremely odd policy. I would also point out that a number of programmes for young people to gain work experience are available, I believe, in smaller towns as well as in cities, such as Modern Apprenticeships and work placement programmes from schools. This bill does not tamper with the training wage, either, which is still available. So I really do not think that the problem the member speaks about is a real one.

I would also call the member’s attention to an agreement that was signed yesterday between Progressive Enterprises and the Northern Distribution Union—it was very happily supported by that employer last night and today; a progressive employer indeed—where that employer has agreed to take everything a step further than this bill goes. All its young workers will be paid from when the agreement kicks in, after the first 200 hours, or the first 3 months on the job, whichever comes first. Workers for Progressive Enterprises supermarkets will hit the full adult wage after 200 hours, or 3 months, and that will happen not only for 16 and 17-year-old workers but also for 15-year-old workers. I am hoping that other supermarket chains and retailers will follow that company’s example.

Further to the purpose of the bill overall, my original purpose was to remove fully discrimination on the basis of age for 16 and 17-year-old workers. That has not been completely achieved by the bill as amended, and I will talk about that a bit more when we come to the debate on the next clause. But in terms of the main purpose of the bill, it is simply unfair that the wages should be different for people doing exactly the same job.

The previous speaker said that the Transport and Industrial Relations Committee received plenty of submissions and could see that these young workers are doing the same job as older workers. In fact, in a number of cases they are supervising and training older workers, which is almost the grossest injustice of all. Particularly in places like the fast-food industry and in some retail outlets, the young workers have sometimes been on the job for 3 years. They are still 16 or 17; they are put in the position of training and supervising older workers. There could not be anything less just than expecting those workers to continue to receive the minimum wage at over $2 an hour less than what the people they are training are receiving. The work is the same, the employer’s expectation is the same, and the job description is the same.

The other thing that is the same is the cost of food, clothing, and transport. That does not change because one is 16 or 17, either. It does not matter what part of the country one is in; it is a myth that the wages young people earn are not for “real things”. Often these young people are helping to support their families. As we know, wages are too low in this country anyway, and some families are on benefits. Often these young people are contributing to their family. In other cases they will be contributing to their own clothing, transport, and food—the necessities of life. These things do not cost young people any less just because of their age.

All workers also need a short period in which to learn the job. It does not matter what age one is when one starts work. It does not matter whether one starts work at 16 or 60, there is an orientation into any workplace. The Green Party certainly does not believe that workers should have to spend 2 years being paid a lower wage, simply because they are learning how to work or how to do a new job.

Wage discrimination is arbitrary, inequitable, and unjustifiable. I am really pleased that this bill, even in its modified form, is taking a big step in the right direction in terms of finally getting rid of this inequity of discrimination on the basis of age.

I am pleased to rise and speak about clause 3, “Purpose”, of the Minimum Wage (New Entrants) Amendment Bill. It is no surprise that the National Party is opposed to the purpose of this bill. From time to time National members say that they want to do something about low wages in this country, and they have the opportunity this very evening to support the purpose of a bill that has a practical impact on improving low pay in this country. Given that opportunity, National members stand up and say they oppose clause 3, being the purpose clause.

Clause 3 states: “The purpose of this Act is to amend the principal Act to provide expressly for a minimum rate of wages to be prescribed for new entrants, …”, and we have talked about the title of the legislation and who new entrants are. This clause describes new entrants as being those who are 16 or 17 years of age and who meet certain criteria. I know that we will have an opportunity later on in the debate in Committee to talk in more detail about what those certain criteria are, but Sue Bradford certainly made reference to the fact that they will be around such workers not being in situations where they are supervising other staff.

Of course, that situation exists at the moment. Many 16 and 17-year-olds came before the Transport and Industrial Relations Committee and were able to tell committee members about situations where they were supervising other staff who were on higher pay rates than they were receiving, simply because the Minimum Wage Act in its present form allows that to occur. Also, one has to say, it was because their employers chose not to pay them what they were worth.

The member Paula Bennett raised the issue about young people in small towns. I spend a lot of time in many of the small towns in New Zealand.

💬 Paula Bennett: Cambridge?

Yes, places like Cambridge, and places like Matamata and Morrinsville.

💬 Hon Member: Sandra Goudie was in Cambridge recently.

They just about ran her out of town, but that is not the subject of this debate. My experience is of being in Matamata on a Sunday and buying groceries. I try not to do that on Sundays too often, but in this particular event, I was. Two young women, both 16-year-olds were there. One was putting the groceries through the checkout and the other one was packing them. It was Sunday afternoon and I asked them what wages they were being employed on. [Interruption] I will talk about stable hands shortly, because that is another group who will benefit greatly from the purpose of this bill, which the National Party opposes.

These two young women were really very aware. They were pointing down the aisle and one said: “Look, that woman down there is doing packing at the same rate as I am.” I think they told me she was on about $12 an hour, and these young women were on $5 and $6 an hour. They were doing exactly the same job, on a Sunday. In years gone by they would have expected penal rates for that as well, but that is a whole different debate again.

So I certainly cannot support the view of the previous speaker, Paula Bennett, that perhaps this is an opportunity to introduce geographical discrimination, because this bill was an opportunity to get rid of age discrimination. The impact of that move will be widely felt in the small towns in New Zealand. It will be greatly appreciated by 16 and 17-year-olds.

I say to Ms Bennett that, yes, people do work in stables in places like Matamata and Cambridge. The legislation will have a big impact on that industry. Those young people are getting up at very early hours and are working very long hours. In fact, they would be able to meet the criterion of having worked for 200 hours a lot earlier than they would meet the criterion of having worked for 3 months. Many of these young people would be meeting the 200-hour criterion in about 4 weeks, such are the hours they work in that industry.

These are the realities out there for young people in these positions. They are working in industries that are well supported by this Government and that are thriving under this Government. This is another piece of legislation coming forward from this House that will further support those young people in their endeavours.