Minimum Wage (Starting-out Wage) Amendment Bill

I rise to take a call on clauses 1 to 3 of the Minimum Wage (Starting-out Wage) Amendment Bill, which are the title, commencement, and principal Act parts of the bill. I think we can probably have quite a lot of debate on the title of this bill, the Minimum Wage (Starting-out Wage) Amendment Bill. It is very interesting that we have got “Wage” twice in the same heading. I would be interested to know how often that happens, actually, in titles of bills.

But I think it says it all, really, in the title—“Starting-out Wage”. It is such a misnomer, because, actually, this is not a starting-out wage amendment bill. This is not a bill that allows people to start out on a wage and gives them an opportunity, as the National Government has said repeatedly, to be paid $11 an hour and be given a chance. This is a bill that starts people out on $11 an hour, and, if they are 16 or 17, it means that they can be returned to $11 an hour after 6 months if they change jobs. So it is kind of a starting-out and starting over and over and over again kind of bill.

In fact, in my first reading speech I referred to it as a “Snakes and Ladders Bill”, because what happens is that 16 and 17-year-olds start—if they get a job—on $11 and they work for 6 months, and then if they are with the same employer, they go on to the adult minimum wage. But, of course, we all know that the kinds of jobs we are talking about under this bill are not going to be the kinds of long-term jobs where young people are working their way up the ladder, working their way up the skill ladder so that after a period of time they will get recognised for their experience and so on. The truth is that the sorts of jobs that are going to be created under this bill and under the title of this bill are low-wage jobs, low-skill jobs, and, actually, temporary jobs and high-turnover jobs where the truth is that most workers will find themselves in 6 months looking for a new job. They have worked their way up the ladder after 6 months to get to the adult minimum wage, and then when they get a new job they go back down the snake—or is it up the snake and down the ladder; I forget which, but anyway—and back they go. Back they go. They work their way up and after 6 months they start a new job, and they start all over again. So it is not starting out; it is starting—in fact, the title of this bill could be the “Minimum Wage (Starting-out Over and Over and Over) Amendment Bill”.

Just to give the Committee an example of what the consequences of this bill may be, I have been talking to the people involved in collective agreement negotiations with two of our major fast-food companies at the moment. Immediately that this came back on the agenda, immediately that the National Government put this bill in the House, those two fast-food companies, which employ large numbers of not only young workers but older workers, have said they want to have youth rates. I remember a time—it was not when the Green member Sue Bradford actually brought the removal of youth rates bill to the House—when those companies were actually at the forefront of saying that they did not want youth rates; they were going to do away with them. They got a lot of publicity—a lot of positive publicity—for that. But now they have got the opportunity—well, they are going to have the opportunity, because of this Government—to reintroduce youth rates.

What I can tell you is that things have moved on during those years since those two major fast-food companies first introduced adult rates for everybody. Actually, it has become a lot more unionised. What I am told is that there will be a push-back from the workers. So this is not going to go quietly. Workers who work in those fast-food companies—thousands of them—are not going to quietly accept an agreement with their employer that allows the reintroduction of youth rates. Having fought for it those few years ago, they are not going to easily give up on it.

There are other things too. There is another title we could have for this bill. I think it could be called the “Minimum Wage (This Government Hasn’t Finished Yet) Amendment Bill”, because we do know that this Government has not finished with cutting wages. We know from the regulatory impact statement that Treasury has suggested that there may be other so-called disadvantaged workers who could be eligible. The language of this bill is horrendous—“eligible”. That actually means workers who could be “forced on to youth rates”.

But what we also know about this Government is that it has an agenda that goes way beyond just cutting the pay of young workers. We are expecting to see that any time now with the new, bright young Minister of Labour, whom everybody on the other side was praising. We are expecting to see in this House in the next month or two some Draconian legislation around employment relations that will not only cut the wages of young people but cut the wages of many thousands of New Zealanders. So this bill, I think, comes with a very strong warning that this Government has only just started on its intention of cutting wages, because, fundamentally, it believes that cutting wages is the way to create jobs, and, as we have discussed endlessly in this debate, because it has no other ideas.

And so, because the Government has no other ideas, this could be called the “Minimum Wage (We Don’t Know What to Do About Youth Unemployment) Bill”, because that is the truth of the matter. We have heard in this debate no ideas from the National Government about addressing the crisis in youth unemployment. We have heard plenty of ideas from speakers on this side of the Chamber about Labour’s ideas for addressing youth unemployment, but we have heard nothing from members opposite except this narrative, which we have referred to before, that somehow if you cut wages young people are going to be so grateful and employers are going to invent jobs that do not exist, because they can pay them nearly $3 an hour less.

I think that what this whole debate is demonstrating is that we have a crisis in youth unemployment, and that we have a Government that has no idea how to address it and is reverting to the very old-fashioned ideas of last century—ideas that we know have failed—and hoping that they are going to make a difference. We know they will not.

Also, some of the dialogue and some of the contributions that we have heard from National Party members tonight and during other parts of the debate is this whole idea that young people are just sitting out there waiting for someone to offer them a job, and because the wages are going to be cut by nearly $3 an hour they are going to suddenly get a job that does not exist, there is going to be work created that does not exist, and so they should be grateful. Actually, they should be really grateful to this Government that it is creating jobs that do not exist. So we could call this the “Minimum Wage (Grateful for Any Job) Amendment Bill”.

The information on the regulatory impact statement from the Department of Labour, or whatever it is called now—

💬 Dr Rajen Prasad: We’re guessing—we’re guessing.

It is guessing. It said very clearly that it cannot tell. It does not have the information to be able to measure the impact of this, and that goes to the heart of the Labour Party’s concerns. We are introducing a measure that will have an impact on 16, 17, 18, and 19-year-olds, and this Government does not know the impact of that. It does not know whether it is a good impact or whether it is going to have any benefit. What we do know is that the Ministry of Business, Innovation and Employment says that it will create between about 400 and 1,000 jobs, but that is before it takes into account the impact of displacement of older workers. So it is crazy stuff. It is really crazy stuff.

My last contribution in terms of what this bill could be called is that it could be called the “Minimum Wage (How Low Can You Go) Amendment Bill”. We heard a very good contribution from Phil Twyford before the dinner break about all of the other examples of workers throughout New Zealand—disabled workers, people who work in small parts of towns, people who work in Northland, and so on—for whom you could make an argument that you could cut their wages to create employment. The problem with that is that it is a race to the bottom. That is a race towards getting back to the kinds of conditions that we had in the 19th century in this country. I really do not believe that Mike Sabin and others in this Committee think that that is the right thing to do. They need to get real and understand that this idea that young people can voluntarily agree to a youth rate is madness, because it is simply not going to happen. This bill will not deliver.

I move, That the question be now put.