SUE BRADFORD (Green) Link to this
I move, That the Minimum Wage (Abolition of Age Discrimination) Amendment Bill be now read a second time. It is with really mixed feelings that I speak to the second reading of my youth wages bill this afternoon. I have mixed feelings because, on the one hand, it is a significant step to get any member’s bill through its first reading and the select committee process, and I welcome the statement of the Transport and Industrial Relations Committee in the commentary on the bill that the majority of members believe the premise on which my bill is based is right. On the other hand, however, it is clear to all that the bill that has emerged from the select committee bears very little resemblance to the bill that went into it.
The fundamental point of my original bill was to remove discrimination based on age from our minimum wage law, with particular reference to 16 and 17-year-old workers. However, the bill as amended, which we are debating here this afternoon, does not do that. It continues age discrimination for young workers, albeit in lesser terms. Even the short title of the bill has been amended by the committee to reflect the fact that this is no longer a bill to remove discrimination; it is, instead, a bill that will allow a new form of discrimination. If we read clause 4 of the amended bill carefully, we see that it continues to allow for minimum wages to be set on the basis of age, and that it actually adds a further category of age discrimination, in the form of the new entrants rate. This is certainly no longer an abolition of age discrimination bill.
What is this new entrants rate likely to be, and how long will it apply for? The amended bill states that the new entrants rate—something horribly redolent of people aged 5 starting school—must not be less than 80 percent of any rate that applies to workers who are 18 years of age. But the bill itself is silent as to the length of operation of this new entrants rate. Instead, the select committee has chosen to make a recommendation to the Minister of Labour that she or he consider introducing a new entrants minimum rate that applies for the first 200 hours of employment on or after an employee’s birthday, and that that rate would not apply to 16 and 17-year-olds employed in supervisory positions. In its current form we are, therefore, being asked to hand a blank cheque to the current Minister of Labour and—and this is more worrying—to a future Minister of Labour to set the length of the new entrants rate by regulation as she or he sees fit, or not to have a new entrants rate at all and simply continue with complete age-based discrimination, as currently occurs.
The main argument that supporters of the new 200 hours new entrants rate are putting up is that young people aged 16 and 17 who are entering the workforce for the first time do not have the basic work skills or experience needed for the job and, therefore, need more supervision and training than workers aged 18 and over. This argument was backed by a handful of employer submitters, including one from just south of Auckland who rather famously offered the committee the opinion that it took her some time to train her young workers to smile correctly for the customers. When I looked around the committee room that day and saw the many broad, natural smiles on the faces of the young Pasifika, Māori, and Pākehā workers from Manukau and the rather dour looks gracing the countenances of a number of somewhat more mature submitters, I could not help feeling that the training in how to smile correctly might be of benefit if it happened quite the other way around.
This argument that young workers need orientation and training when they start a new job does, of course, have a basis in reality, but that reality is the same for anyone of any age who starts a new job. All of us take time to learn the job itself, and to learn the kawa of the particular workplace, and the annoying little requirements essential to survival there. In fact, when we are young our brains are sharper and our ability to learn and adapt is somewhat greater than when we are older. Even if one supports the idea of the new entrants rate, surely 1 month would be long enough, rather than 3, 6, or even 9 months.
The National Distribution Union, one of the main unions representing young workers, says: “Our numbers show that 50 percent of 16 and 17 year olds would take 5 months or more to qualify for the full minimum wage. Some of them will have turned 18 long before that. Others will have had many more than 200 hours work experience before turning 16 but that isn’t going to be counted.” Indeed, many young people these days have already been in the workforce for a considerable period before they even turn 16. As most members of Parliament will know from their own experience with family members and friends, a lot of young people have been working part-time in the local shop, petrol station, takeaway, or elsewhere for some months if not years by the time they reach their 16th birthday. To then suppose that these experienced workers should be plunged back on to a lower wage if they start a new job after their 16th birthday shows contempt for the reality of the time and effort they have already put in to adapting as successful participants in the New Zealand workforce. It is simply a continuation of age-based discrimination by other means and is quite the opposite of what the original bill intended.
I was very impressed with the level and quality of most of the submissions we heard at the select committee, even the ones I did not agree with. A majority of submissions stated that all workers should receive equal pay for equal work, regardless of age. I want especially to thank the Human Rights Commission, the Human Rights Foundation, and the Children’s Commissioner who, along with a number of others, called for the repeal of section 30 of the Human Rights Act, which entitles employers to pay lower wages to those aged under 20 years. Unfortunately, the committee did not give adequate consideration, I feel, to these points nor to our responsibilities under international human rights or International Labour Organization conventions.
Instead, it was swayed more by the anecdotal accounts of how the abolition of youth rates could act as a barrier to young people obtaining work or the negative effect it would have on young people’s education by encouraging them to leave school too early for so-called high-paying adult minimum wage jobs. These issues were mentioned in the National Party minority view, and, I understand were also behind the Labour and New Zealand First members of the committee sponsoring the amendments that have come through. These two concerns completely miss the point and are simply used as excuses to continue the discrimination against young people.
Firstly, most young workers aged 16 and 17 are actually in school or in other training. An increase in the minimum youth wage to the adult rate will have a positive effect for them, not negative. It will mean they will be able to work less and study more for the same income. Will young people really be tempted away from school or other training into full-time work by the prospect of earning the princely sum of $450 a week—the adult minimum wage? I do not think so. If it is good enough for us to have stopped using these so-called positive wage discrimination arguments for Māori and women, why should we be using them for young people?
Then there is the issue of compliance costs. To implement a new entrants form of wage-based discrimination in the way that the amended bill proposes, introduces yet more compliance costs for employers. A number of employers have already got rid of, or would like to get rid of, youth rates altogether. What stops others from doing this is the ability of their competitors down the road to continue to pay youth rates and therefore have a lower cost structure.
This brings me, finally, to the elephant that sat in the select committee room right throughout the hearings—that of human rights. I am referring to legal advice to the Attorney-General on the consistency of my bill with the New Zealand Bill of Rights Act 1990. That advice stated: “it is our view that the principal Act does not authorise the Governor-General to make orders that discriminate in a way that is prohibited by the Bill of Rights Act … Section 6 of the Bill of Rights Act requires that wherever an enactment can be given a meaning that is consistent with the rights and freedoms contained in the Bill of Rights Act, that meaning must be preferred to any other meaning. … Based on this analysis the Bill appears superfluous.” What that opinion means is that the regulations allowing for youth rates that have been promulgated for many years under the Minimum Wage Act could be ultra vires when the principal Act is interpreted in relation to the New Zealand Bill of Rights Act.
My gravest concern with the bill as reported back is that it adds new forms of discrimination rather than removing them. We should not be passing law that is inconsistent with the New Zealand Bill of Rights Act. The bill still needs a lot of work, and there is still time to do this work before, and when, it reaches the Committee stage. I urge all parties to vote for the second reading to enable us, during the Committee stage, to undertake the work to bring this bill back more closely to its original kaupapa.
KATE WILKINSON (National) Link to this
In rising to speak to the second reading of the Minimum Wage (Abolition of Age Discrimination) Amendment Bill, it is interesting to note that when this bill was originally introduced by the honourable member Sue Bradford it was quite simply to get rid of the youth rate. It then morphed into a bill that introduced a new-entrants minimum rate that would apply for the first 200 hours of employment for 16 to 17-year-olds, during which time they would be paid 80 percent of the adult minimum wage—that is, the youth rate—and after which they would be paid the adult minimum wage. The question is whether the bill is better or worse than before it went to the select committee. Who knows? Media reports over the issue originally suggested that the bill itself may be pulled by the very author of the bill because it has been so altered since its original draft that it is now being opposed.
I would like to make one comment in relation to what the honourable member Sue Bradford has stated, and that is in relation to age-based legislation and whether it is discriminatory. The wonderful irony of that argument is that if it is age-based legislation—and it is age-based legislation—and if it is discriminatory, which we do not believe it is, and if it does comply with the New Zealand Bill of Rights Act, then it would be discriminatory and still age-based whether the age was 12, 16, 18, or 20. So whatever the age limit, it would, based on that argument, still be age-based legislation, and all this bill does is increase that age to 18.
Can I say at the outset that whatever one’s view on this, it is important to state that National believes that all workers, whatever their age, should be valued for the work they perform. They should receive fair pay for a fair day’s work. We all want a high-wage economy, but that is not achieved by propping it up by artificial and arbitrary levels. It is also important when considering passing legislation that some consideration is actually given to the consequences it will have, to the problem it is supposed to be addressing, to the solution it proposes, and to whether that solution will work, may work, or may in fact do the exact opposite of what it is trying to achieve.
We believe that this bill will not work for youths or for employers, for a number of reasons. We heard submissions that many employers already pay above the youth minimum wage. In fact, some employers pay their staff above the adult minimum wage because they recognise that the value staff provide warrants a higher level of pay. Secondly, in some cases youths may not be able to provide the same value to an employer as older employees, so the minimum rate of pay provided to them should be set at a lower rate than for those older than they are; they are not doing the same job.
There may be youths who suffer because in future employers will have to factor in a full wage bill for youths and may choose not to employ them at all because of this. This may be a disincentive to employing youth in the first place.
It is a perverse incentive. Increasing the minimum wage that a 16 or 17-year-old can earn creates an added perverse incentive for youths to leave school. We appreciate that there is a 200-hour threshold and that the initial reduced take-home pay may lessen the incentive for a youth to leave school to undertake work. But assuming someone left school to undertake full-time work, or near full-time work, the 200-hour threshold would be finished maybe within a month or a month and a half. The incentive to leave is still reasonably high for some. We want a highly skilled, high-wage economy, and encouraging youths to leave school before they have attained those skills is not the right way to do it.
Furthermore, if youths have to be paid at the adult rate, then some employers may simply choose not to employ them. In effect, raising the youth minimum wage rate will risk young persons being priced out of the market. In some cases employers who pay 16 or 17-year-olds the youth minimum wage do so because that is all they can afford. That is the price that is set. If youths had to be paid at the adult rate, then the employer may simply choose not to employ them. We are concerned that this bill may price young people off the job market. That is a very, very serious consideration and a very important reason for National to vote against this bill. National is not against the employment of youth. This is about fair pay for fair work. We do not want this bill to be seen as a barrier to employing young people.
Support for a youth rate is premised also on the belief that 16 and 17-year-olds are not worth as much to their employers as someone aged 18 years or more. The new-entrant rate compromise is designed to recognise that 16 and 17-year-olds initially are not worth as much as someone who is older, but it suggests that after 200 hours of employment those young people have had enough experience in the workplace to mean they have the same value to an employer as someone over the age of 18. We have heard—and we have to agree—that age limits are by their nature inherently arbitrary and do not apply well to individual cases. There is nothing to suggest that the 18th birthday of a particular individual means that on the next day he or she will automatically be of more value to the business than when they were 17. This legislation will not change that. This legislation will still kick in once the youth turns 18.
There are also some practical problems in the presumptions the legislation makes in relation to the 200-hour threshold, and I would like to mention some of those. The first example is of a youth working for 200 hours for an employer, thus qualifying for the adult rate. That is fine. The employer has had 200 hours to upskill the youth and the youth has had 200 hours to gain experience within that workplace to ensure that he or she is worth, or may be worth, the adult rate to the employer. I give another example of a youth who works for employer A for 50 hours, changes jobs and works for employer B for 125 hours, then again changes jobs and works for employer C for 25 hours. After working 25 hours for employer C the youth, under this bill, would qualify for the adult rate. Because the 200 hours accumulates over several employers, and despite the youth having spent only 25 hours with employer C, employer C still has to pay him or her the adult rate. That assumes—perhaps rightly, perhaps wrongly—that the experience the youth has gained in previous employment is transferable to his or her latest employment.
A third example is where a youth works 70 hours for employer A and over the same period works 130 hours for employer B. Having accumulated 200 hours work, employer A and employer B both have to pay the youth the adult rate. The youth at that stage has a combined total of 200 hours. Again, this assumes that the skills and experience in the two jobs are transferable—that they are equal—so that the youth is valuable enough to the employers to justify them paying him or her the adult rate.
Finally, I would like to add—and on this point we are in complete agreement with the Green Party, which may be unusual, and I quote from its minority report on the bill—that “this will add to the compliance burden for employers”. We are concerned about that. We are concerned about the collection of hours and about the value of the hours. If a youth is working for two employers at the same time—not exactly the same time, obviously—then just because the 200 hours clicks over, the youth is entitled to an adult rate, notwithstanding the skills and experience involved.
If this bill is to avoid exploitation and discrimination of young workers—and we do not condone exploitation and discrimination of young workers—then it should have been so framed. This bill risks pricing young people out of the labour market. It creates a perverse incentive for young people to leave school, rather than boost their own skills and training. It fails to recognise that many employers already pay above the minimum wage to youths, and it adds to the compliance costs of business. For those reasons National is opposed to the bill.
Hon RUTH DYSON (Minister of Labour) Link to this
It gives me pleasure to support this Minimum Wage (Abolition of Age Discrimination) Amendment Bill at its second reading. I begin by congratulating Sue Bradford from the Green Party on taking the initiative, introducing the bill to the House, and stimulating the debate at the Transport and Industrial Relations Committee. I also acknowledge and thank the other members of the select committee for their rigorous consideration of this issue.
Since Labour was elected to lead the Government at the end of 1999, our Government has reviewed, then raised, both the minimum youth and adult minimum wage annually, and that is a fact that I am very proud of. Under the previous National Government, the youth minimum wage was set at 60 percent of the adult minimum wage. Our Government increased this to 80 percent of the adult rate, and we also lowered the age of entitlement for the adult rate from 20 years, as it was under previous National administrations, to the 18 years that it now is. Prior to that, one had to work on the youth rate, if one was on the minimum rate, right up to the age of 20, rather than 18 as it is currently.
It is my view that those steps have been very positive, but it is still obvious that there is a debate to be had about the suitability of paying workers at a different rate for the same job just because of their age. That debate has in part been held at the select committee and it is now continuing.
Labour recognises that employees who are aged 16 and 17 often do the same work as adults. Therefore, for those employees to earn 20 percent less than their adult colleagues is unfair. In employers’ submissions to the committee considering the bill it was noted, though, that 16 and 17-year-old workers often lack the work socialisation skills that older workers have. Submitters also noted that they did not think it was fair that youth supervisors were paid less than the adults they were supervising.
In response to the submissions and within the original intent of the member’s bill, the Transport and Industrial Relations Committee has proposed that for the first 200 hours of their employment, 16 and 17-year-olds should be paid at no less than 80 percent of the adult minimum wage. After that 200-hour period, 16 and 17-year-old employees will be paid the adult minimum wage. Those 200 hours of employment can be accumulated across several different employers.
The previous speaker talked about increased compliance costs, as if this strategy would be a new trigger. Actually, the strategy changes the trigger from a requirement of 2 full years of work and the date of one’s 18th birthday to a requirement of 200 hours of work, which even for a part-time worker is a significant step forward. Concerns that those younger workers who are in positions of responsibility would be disadvantaged by the bill have also been answered by the committee’s recommendation that the minimum rate would not apply to 16 and 17-year-olds who are employed as supervisors.
The enticement of young people away from the education system—from high school, polytechs, apprenticeships, or university—with the possibility of a job that might pay higher in the short term but is unlikely to lead to better career prospects in the long term, is an issue. The 200-hour threshold is intended to protect against the possible risk of a negative impact if we were to immediately abolish youth rates completely.
This measure will be yet another step in our steady progress in ensuring that all workers, including young workers, have fair minimum-pay protection. This year the youth minimum wage was increased from $8.20 to $9 an hour. This stands in stark contrast to the youth minimum wage of $4.20 per hour under the previous National Government in 1999.
From Labour’s perspective, the voices of employers and unions, and the voices of young New Zealand workers, should be heard. The Transport and Industrial Relations Committee was an appropriate forum in which to host that debate. I know that the members of the select committee gave fair consideration to both the perceptions and the facts around this debate, and I personally thank all the members of the committee for their considered deliberations on this matter. The select committee’s proposals offer a balanced way forward on a complex issue, and they address employers’ concerns as well as recognising that younger workers doing the same job as adults should be paid fairly.
This member’s bill is another example of our Government working with other parties in an MMP environment to achieve the best solution for the diverse interests of all those affected by these proposed changes. I wish the next stages of this bill a very speedy progress.
HONE HARAWIRA (Māori Party—Te Tai Tokerau) Link to this
Ā, tēnā koe. Tēnā tātou te Whare. I tērā wiki, ka tukuna kia kitea e Aotearoa te tino pikitia, arā, Ka mau te wehi a Kerehi. He waimarie kua puta tēnei pire i te wiki nei, arā, te pire kia murua i ngā utu whakaparahako i te rangatahi. He tino miharo rawa atu ngā mihi mo taua pikitia, ā, neke atu ki te 22 miriona taara, te pūtea kua kohia i Amerika. I Ingarangi tino hāwene hoki te BBC me te kī “E ōrite ana ngā mahi o te Pāremata ki tērā o tētahi pukapuka whakamataku.” Ā, ka tika koia nei te āhua o te Pāremata nei.
Ko te pikitia nei he korero mo William Wilberforce me tōna whawhai, kia mutu ai te mahi whakataurekareka i te kirimangu e noho ana ki ngā whenua i raro i te mana o Ingarangi. Nā, hara i te mea i whai atu au i ōna tapuwae engari, he ōrite ngā whakaaro. E kore au e noho koretake nei kia tae mai te tau 2027 hei muru i ngā utu whakataurekareka rangatahi. E tika ana kia tae mai i nāia tonu nei. Hoi nō, me hoki taku kōrero ki ngā pikitia. Ko te āhua nei kua whakaoreoretia ngā tāngata o te ao, he aha ō rātou whakaaro mō te mahi whakataurekareka tangata. Kua puta muri mai he rōpū, Te Huringa Whakamīharo, ko tōna kawenata kia wetekina ngā here taurekareka kua pā ki te 27 miriona tāngata o te ao.
Ka huri au ki tēnei pire me te whakaaro, me ahatia e tātou tēnei pire Whakaparahako Utu ki te Rangatahi, ā, tērā pea, ka uru tēneki ki te kāri ripoata o te rōpū Huringa Whakamīharo. I te taenga tuatahi mai o tēnei pire ki te Whare i te Pēpuere o tērā tau, ka mau te wehi o te whaikōrero o taku tumuaki a Tariana Turia, me tana kōrero, e tino tautoko ana mātou o Te Pāti Māori i tēnei pire, ā, i whakahīhī tā mātou tū ki te taha o ngā rangatahi. Engari, konei au i tēnei rā e mea ana, e kore mātou e tautoko i tēnei pire i te mea, “E whakakahoretia ana e mätou te pire whakataurekareka kaimahi a Wayne Mapp, ā, e kore hoki mātou e tautoko i tēnei pire whakataurekareka rangatahi a Reipa.” Kore, kore, kore rawa atu!
Nō reira, me pēhea rā ka tino hē te mutunga o te kōrero nei? Ko te pūtaketanga o tēnei pire, kia mutu ai ngā utu whakaparahako kaimahi—he kaupapa tino mīharo ka tautokohia e mātou. E mārama hoki mātou ki ngā hiahia o wā mātou rangatahi. Me te mōhio anō hoki, 30 paihēneti o ngāi tāua, kei nga tau 10 ki ngā tau 25, ā, tae atu ki te tau 2050, 50 paihēneti o mātou kei raro tonu i ngā tau 26. Nā tērā ka kitea te tini o ngā Māori ka pā ki ngā āhuaranga whakaparahako i te Ture Iti Te Utu o te tau 1983.
I tautoko mātou i te mōhio ko ngā Māori me ngā Pasifika nga tino rawakore. Me te mōhio anō hoki ko ngā rangatahi Māori, Pasifika hoki me ō rātou whānau ngā kaimahi rawakore rawa atu o tēnei whenua. Ā, mēnā ka whakapono mātou ki te tono a te rōpū Tino Rangatiratanga Tai Tamariki me te Ture Rangatahi, arā, ahakoa kua hipa ngā tau e whitu i muri mai i te tūtanga o te Ture Whakawhanaunga Mahi, ko ngā rangatahi tonu ka noho tuwhera ki ngā mahi whakahāwea kaimahi. Kua takahia tonu te mana o wā tātou rangatahi. Horekau he kirimana ā-mahi, ka pangaia tonu mō te kore noa iho ngā whakarere ketanga o te āhua o te mahi, hakoa e kore e pānuihia me ngā whakahawini, mahi tinihanga i ō rātou wāhi mahi.
E te Kaihautū, nā Martin Luther King i tuhi tōna reta i a ia e mau i te whare herehere o Birmingham i te tau, 1963 te korero: “Mēnā ka takahia te mana tangata i konei, whānui rawa atu te raruraru.” Mēnā ka tangohia e Te Pāti Māori ngā kākahu o te pire nei, ko te pātai, he aha ai i tangohia ngā kupu “muru whakaparahako” kia whakaurua ngā kupu “tīmatanga hōu”. Nā, hakoa ka whakakākahutia e Reipa tēnei pire ngā momo kākahu katoa, e kore e taea e rātou te peita ā-hau nei, kia kore e kitea ēnei mahi whakaparahako.
Kua whakaae te komiti Pāremata ki tētahi mahi whakahāwea hōu. I a rātou mahi mūrere ki te whakapai i te kino, arā, ngā hāora 200 nei, ka tapaina he “tīmatanga hōu” mō te kaimahi hōu. Ko te utu he “utu iti nei, ā, ko tā rātou whakamārama, he āhua ngohengohe nei, he “wā ako” anō hoki. Ko te mea katakata, ko te utu “tīmatanga hōu” e ōrite ana ki te utu iti mō ngā rangatahi i tēnei wā. Nō reira, he aha rawa te rere ketanga?
Koia nei i kōrerohia e te rōpū Huringa Whakamiharo, ko tēnei te āhuatanga taurekareka hōu—ngā tāne, wāhine, tamariki hoki kua ākina ki te mahi i raro iho o ngā kirimana ā-mahi, horekau he mana, te mahi rānei i ngā wāhi mahi nanakia. Kahore te utu iti nei kua tohua i raro i te utu “tīmatanga hōu”, he whakatika i ngā whakaparahako ka tau ki runga i wērā 16, 17 rānei te pakeke engari, ka taea te kī, tērā pea kua whakapakaritia. I raro i te ture ka taea kia utua ngā rangatahi i te 80 paiheneti o te utu mō ngā kaimahi pakeke mō ō rātou hāora 200 tuatahi. Kei raro e putu ana te kaupapa ārai i te mana o ngā kaimahi o Reipa! Aue, aue, taukuri e!
Ko ngā mahi o te tika e wānangahia nei, kei roto i te wāhanga 21 o te Ture Tikanga Tangata o te tau, 1993, me te wāhanga 19 o te Ture Mana Tangata o Aotearoa o te tau, 1990. Nō reira, mēnā e kore koe e mārama, i raro i te wāhanga 5 o te Ture Mana Tangata kore taea te kī, he tika paku nei tenei momo whakahāwea. Ko te kōrero a wētahi kaiwhakatakoto kōrero, ko ngā utu rangatahi, kei te utua i raro iho i te ture Utu Iti i tēnei wā. He tirohanga tuatahi mō te āhua o te whakaparahako i raro iho i te Ture Mana Tangata o Aotearoa. Ko tā te tautoko a te Komihana Tamariki, a Tākuta Cindy Kiro, kaua e rere kē te utu kia kore te whakaparahako i te rangatahi, mēnā e orite ana ngā mahi. Mēnā e ū ana tātou ki te kaupapa whakarangatira tangata, me whakamana tātou i ngā ture hei ārai i ngā tāngata kua whiwhi mahi, hakoa kahore anō rātou i eke ki te18 tau. Kua kitea e ia i taua whakaaro i te ripoata ki te käwana mai i te Komiti Whānui o te Ao mō te Mana o te Tamaiti, i te tau, 2003.
E kore tēnei Kāwanatanga e aro ake ki ngā tirohanga, ki ngā whakarite rānei o te Komiti Muru i te Mahi Kaikiri. Ko te tino whakapono a Te Pāti Māori kia riro e te kaimahi te utu ka utua hakoa he aha te pakeke. I te pānuitanga tuatahi o tēnei pire, he whakaatu mātou i wā mātou āwangawanga mō ngā mahi whakahāwea ki ngā kaimahi hauā. Kei roto i te Ture Kia Iti Te Utu o te tau 1983 e mau ana—he kaupapa kua tau i raro i te pire Tautoko Mahi Mō Ngā Tāngata Hauā (Ture Whakakore me wētahi atu Take). Engari, kore mātou i whakaarohia, horekau he tuarā tā te Komiti Waka, Tikanga Mahi Tahi; tō rātou mataku, kia whakakorea ngā mahi whakaparahako i a tātou rangatahi, rātou anō ka noho tuwhera ki ngā kino o te ao.
Tini ana ngā rawa ka taka ki a Reipa mēnā i whakapakari ai tō rātou tū mō te mana rangatahi engari, i te wa o ngā whiriwhiringa o te komiti Pāremata, ka rere kē haere te āhua o Reipa. Nā, kua tae ki tēnei wā, kore rere kē atu te āhua o Reipa ki tō rātou hoa a Nāhinara, rātou i tautoko i te pire a Wayne Mapp. E whakapono ana mātou, mēnā ka tōtika te utu ki te rangatahi, ka pai ake te āhua o wā rātou wāhi mahi; ā, ka whai haere te oranga ki ō rātou whānau.
I pānuihia e te Komihana Mana Tangata tētahi rangahau, arā, i tiro whānui ki te 458 tāngata, ā, ka kitea i reira e 81 paiheneti i tautoko kia tōtika te utu i te rangatahi. Nō reira, he aha tūturu ai, ka āhua tame heihei te komiti Pāremata, kia kore rātou e tautoko i te kaupapa mana tangata.
Ko tēnei te 200 tau mai i te pire a Wilberforce kia murua ngā kaupapa whakataurekareka tangata i te Pāremata o Ingarangi i te tau, 1807. Nā tōna kaha ki te whawhai, nātōna māia, hakoa te tini o ngā wā i raru ai ia, ka riro i a ia te taitara. “Ngākau Whakawā o te Pāremata”. Ko tāku e whakaaro i te tau 2007, mēnā ka taea e ngā mema o te Whare te whakawā i ō rātou ake ngākau, te pōti kia whakakāhoretia i tēnei pire i te mea, kua huri tuarā a Reipa ki te kaupapa taketake i hangaia i te tuatahi. Kore rawa mātou o Te Pāti Māori e tautoko i tēnei pire i te mohio, he pire whakataurekareka i nga kaimahi rangatahi. Te mutunga mai o tērā hē, me whakamā tātou katoa.Tēnā tātou katoa.
[An interpretation in English was given to the House.]
[Greetings to you, and to us all in the House. This time last week, the new blockbuster Amazing Grace was released on to New Zealand screens—timed conveniently for the reading of the Minimum Wage (Abolition of Age Discrimination) Bill—a movie that has received rave reviews around the world, climbing to the top 10 in the USA’s box office charts, where it made over $22 million domestically. In England, even the good old BBC got excited, reporting that “It makes the workings of Parliament as gripping as a good suspense thriller.”, which, of course, is an accurate description of life here in Parliament.
The film tells the story of William Wilberforce, who over 20 years led a fierce political battle to abolish slavery and its trade throughout the British Empire.
So I come to this bill today, wondering whether what we are doing with this
So how did it all end up so wrong?
As Martin Luther King Jnr wrote in his 1963 letter from Birmingham Jail, “Injustice anywhere is a threat to justice everywhere.” The Māori Party found it extremely revealing that the select committee chose to amend the title of the bill, removing the words “abolition of age discrimination” and replacing them with “new entrant”. And we ask why. Well,
The select committee has opted to introduce a new form of discrimination, justifying the repackaged 200-hour “new entrants” minimum wage as being all about “soft skills”, and representing a “learning phase”. Funny, that, but this “new entrants” rate is set at the same rate as the current youth minimum! So what has changed? This is what the Amazing Change movement calls the new form of slavery —the men, women, and children who are physically forced to work, often under the guise of meaningless contracts or in sweatshops. The “new entrants” minimum rate to be set by minimum wage order for 16 and 17-year-olds fails to address the issue of discrimination—indeed, it could be said that it entrenches it. It will make it legally permissible for young people to earn 80 percent of the adult wage for their first 200 hours. So much for the
The rights in question are those
This Government ignores the observations and conclusions of the Committee on the Elimination of Racial Discrimination.
Labour members
The Human Rights Commission shared the results of a survey of 458 respondents, of which 81 percent considered it important that young people have a fair wage. The commission also reminded the select committee that there is no strong evidence that a youth minimum wage is necessary to increase employment of 16 and 17-year-olds. So what could possibly be the reason that the select committee would chicken out from standing up for the right to non-discrimination?
This year marks 200 years since Wilberforce’s bill abolishing slavery was passed in the British Parliament of 1807. For his courage, and the enduring struggle he persisted with, despite a series of defeated bills, Wilberforce was awarded the title “Conscience of Parliament”. I wonder whether, in this Parliament in 2007, the members of this House are prepared to examine their conscience, and vote to oppose this disastrous back-down on the original proposal to abolish age discrimination in benchmarking a minimum wage. The Māori Party will never support discrimination against workers, which is just what this bill promotes. This discriminatory bill is wrong, and we should be ashamed of it. .]
PETER BROWN (Deputy Leader—NZ First) Link to this
Well, I have to say, listening to that contribution, that the member clearly cares. Clearly he is concerned, but he is not concerned enough to go to the Transport and Industrial Relations Committee and listen to submissions, and he is not concerned enough to take a genuine interest when the public of New Zealand came before a committee of MPs to outline their case.
But I have to say to the member that he made another good point, which I want to concur with. The film Amazing Grace is an absolutely excellent movie. I say, for those who have not seen it, that it is well worth seeing. It is largely the story of an English MP who has genuine concerns about people; he does not bad-mouth people, and he finally gets listened so. So I say to this House that if members can think of an English MP who, basically, does not bad-mouth people and thinks about genuine concerns, he or she is well worth listening to. I recommend that members take the member’s advice.
We gave some serious consideration to Sue Bradford’s original bill. We listened to the people who made submissions to the Transport and Industrial Relations Committee very honestly and very openly, and they made some very good points. Nevertheless, the Government made a move—and I think it is a very good move—to introduce a new entrants rate, and New Zealand First will be supporting this amended bill as it has come back to the House.
Let me outline some of the concerns put to the select committee by a number of employers—small employers in particular. They said that they take on young people to give them their first chance. One lady in particular impressed me with her submission. She told us about the difficulties she has faced with some young people. They do not turn up and they do not take the business to heart; they have all the skills, they know what to do, and they adapt themselves, but they consider going to work as secondary to having a good time. Nevertheless this lady has persevered by employing young people. I thought she had a very good point. She made it clear that the only advantage, if that is the appropriate word—I do not think she used the word “advantage”, but I will—that the only difference between a younger person and an older person in terms of cost is the youth minimum wage rate. She said that if she is compelled to pay what she called the adult minimum wage, then she would employ older people.
Wayne Mapp was on the select committee at the time, and he has just acknowledged agreement. So that is a genuine concern. New Zealand is made up very largely of small businesses.
The second thing that concerns us—particularly my colleague Brian Donnelly, who is sitting alongside me now—is the incentive that paying the minimum wage will give young people to sacrifice their education. If I could give a young person three pieces of advice in one word it would be “education, education, education”. If young people think they can leave school at 16 years, work in the workforce, and advance themselves without being fully educated, then they are fooling themselves. If we abolish the youth minimum wage and put those young people straight on to the minimum wage, we will give a number of them the incentive to leave school and go into the workforce then and there. New Zealand First is not prepared to chance that on a one-off basis.
It might not only be young people who give themselves the push to join the workforce; it could well be their parents. A parent may say: “Well, you can now earn as much as your father. Go out there and earn it.”. So the incentive to join the workforce could, first, come from the individual youngster, or, second, from his or her parents. I do not normally tell people about my own growing up. I have to say that it was quite a long while ago, when I was—
I can tell Mr Hide that, believe it or not, it was last century. My father wanted me to leave school at 15, I think it was in those days.
Charles Dickens was a personal friend of mine. I knew him well at school. I read many of the books he wrote.
My father was very keen for me to join the workforce at 15, but my mother knew my desire to become a merchant navy officer. For some peculiar reason I had wanted to do that from when I was a very, very young guy, and I had to get certain school qualifications. She knew that if I left school at 15 I would never get there. In our household it was she who compelled my father. She said: “Look, if Peter wants to stay at school and do what he wants to do in life, we’re going to support him.” It was a little bit more toey than that, but the point I am trying to make is that, at times, parents do encourage their kids to leave school too early, and this would be another incentive to do just that.
The other point I want to make—and I know that Mr Hide will not overlook it—is that as a result of New Zealand First being in this House the minimum wage is going up to $12 an hour by the end of this term. That would not have occurred but for the political party that I stand here representing right now. It was part of our confidence and supply agreement with the Government. The Government put a little rider on the end—“subject to economic conditions”, or something like that—but we will get to $12 an hour, which means that the youth minimum wage will become $9.60. Had we not reached that agreement with the Government, one could expect that at the end of this term the minimum wage would be about the $10 mark, which would mean a youth minimum wage of $8. So youngsters will get an increase of something in the vicinity of $1.60 that they would not have got but for the political intrusion by New Zealand First. We ensured that the minimum wage will go up and, as a result, the youth minimum wage will go up. This new entrants rate is a step in the right direction. It may not be the be-all and end-all, but it is a good point for youngsters to start their working career from.
As to the 200 hours, we recognise that if a person is working full time it will take a matter of weeks, but if he or she is working part time it could take a good deal longer.
They work in the holidays and when they finish they go back to school. The next time, they start all over again. That’s how it works.
I can promise the honourable member that if there is such a case, then New Zealand First will be prepared to look at it.
The point I am making is that it will not take terribly long, in anybody’s book, to get to the 200 hours. As the 200 hours will be spread across all employers, the biggest problem will be keeping records. A guy could work 10 hours a week for company A, and then 2 weeks later work 10 hours a week for company B, and someone has to keep track of those records. I have a feeling that there will be employers who will say: “I don’t want to be bothered keeping a track of that. We’ll give you the full minimum wage anyway. You’re only 50 hours, or 60 hours, or 10 hours, or whatever, short of the 200 hours. We will put you on the minimum wage virtually from whoa to go.”
I think the Government has got it right. We have had a long discussion in New Zealand First about this bill, about the first bill that Sue Bradford appeared with, and about the way the Government has doctored it, if I might use that language. We think it is fair, we think it is a good move, and we think that this will work exceedingly well, given the opportunity both for employers and for young employees.
JUDY TURNER (Deputy Leader—United Future) Link to this
I spoke at the first reading of the Minimum Wage (Abolition of Age Discrimination) Amendment Bill, and United Future supported its first reading. We felt there were some very good intentions contained in the bill, and we wanted to see what the select committee would do with the raw material that was in the first draft. I would like to congratulate the Transport and Industrial Relations Committee on what has come out of that process. It certainly has addressed some of the concerns that United Future signalled at that first stage. Our concern was that we could end up disenfranchising the very people whom this bill intends to help; that is, we would price young people out of the labour market, so that if employers had a choice they would go for the more mature workers, in the belief that they would be employing people with a better work ethic. We think that this new entrants provision improves the bill immensely.
One of the things that has always amazed me, particularly since I moved to Wellington for part of the week, is the huge difference between the life experiences of young people in the city and young people in the provinces. We raised our children in the provinces. What is quite typical out in the provinces is that when young people leave school, either to go into training or to go into work, they often have to leave home; that is not uncommon. Smaller towns do not always provide work or training opportunities. So it is quite possible for someone to be 16 and leaving home for a work opportunity that he or she really wants—that person has weighed up the options and feels that for his or her life this is the best way forward—but somehow that person has to survive independently on youth rates, which is extremely difficult. This bill provides the opportunity for young people who are working to capacity and doing a good job to have that work recognised.
I do not agree that this new provision is in any way similar to Mr Wayne Mapp’s bill. This provision does not mean that a person can be let go at the end of the 200 hours if he or she has not met the standards. It is only a training period, where the skills that a person needs are put into place.
As a parent who has raised three children, I often look with appreciation on some of those early jobs that my children had as teenagers, such as working at McDonald’s, working at all sorts of little restaurants, and labouring on worksites. They learnt so much from having good bosses in those situations. They had a lot of skills to learn. They had to learn how to fill downtime, when there was not an obvious job facing them. They had to find that secondary level of activity on a worksite. These are all skills that they did not necessarily have, coming out of the home environment. They had to pick up a lot of skills, and they became extremely employable young people.
I think there is a real need for a training period. Certainly, employers will tell us that it costs them a lot to employ somebody who has a low skills set and low employment experience. That is why, for instance, we have support for disabled people, where we help them to come up to speed. We understand that for an employer to take on disabled people, he or she will have to spend some considerable additional time training them. It is a very similar situation here.
United Future is pleased with the work that the Transport and Industrial Relations Committee and the Government have done. We think that the additional provisions have improved the bill, and it means that we can continue to support it at its second reading. I do want to signal, though, that I heard a few rumours about amendments that could be floating around at the Committee stage. We will be watching those very carefully, to make sure that any further amendments made at the Committee stage do not disqualify us from giving further support to what we believe to be right. We would like to be able to support this bill right through to its third reading, and with the bill in its current form we would be able to do that. We are very happy to support the second reading.
RODNEY HIDE (Leader—ACT) Link to this
I listened to Hone Harawira’s speech and I am quite surprised, given the Standing Orders, that we are considering this bill, because it is clear to me that the bill has been so changed in its purpose that it is a different bill. Technically we should bar it from consideration in this House, it would seem to me. Obviously, I am not right, because I know that the clerks and the Speaker are very good on this. This is a bill that is designed to prohibit discrimination, in the terms described in the bill, but what has come back from the select committee is a bill that just perpetuates discrimination, and that is why the bill had to have its name changed.
Having said that, I take issue with Mr Harawira’s point. He quoted Martin Luther King and his concept of discrimination. I should say that ACT opposed the bill at its first reading and opposes it still—however, I understand it is a different bill now. I think the key point is this idea of discrimination and the concern that Martin Luther King had, that people should be treated equally by the law and should be free. I believe that everyone in this House should support that.
But in order to be free we have to be able to live as we choose, and not have the Government telling us who we can work for and at what rate of pay. That removes freedom. If I am unable to pick raspberries for a price that I am willing to pick them for, for someone who is prepared to pay for them, I am not a free person. Someone is making the decision. In fact, that is the situation that makes me a slave. The Government is saying that I cannot work. Rather than concentrating on what Martin Luther King said, we have twisted it here today and turned it inside out. Let us think.
Hon David CunliffeI know that David Cunliffe likes getting exercise. He is one of those MPs—and it is easy to do—who stands up in this House and says: “I care about poor wages. Let’s make a law about it, to show how much I care.” David Cunliffe has never in his life actually employed anyone. He has never in his life been employed in the productive sector. He has always lived off the taxpayer.
I ask members to think about it. If this kind of legislation worked to boost wages, why are we debating a piddling $12 an hour with New Zealand First? Why not make everyone rich and make it $100? Everyone thinks that is silly, do they not? In fact, why not make it $100 an hour for a 16-year-old? We are against slavery, are we not—let us make it $100 an hour, and let everyone get it, and we will be rich.
We know the consequence of doing that. Suddenly the House has gone quiet. We know the consequence of that—there will not be very many people working, because for the minimum wage to have an impact, it has to force wages above the going rate. That is the trouble with it: if members vote for a minimum wage, yes, it is good for those who have work, but it excludes people from the job market. Where is the justice in that? Where is the fairness in that? How does that help a Māori youth wanting to get a job? Of course we want that Māori youth to have a job. If we want that, we have to have the freedom to set a price.
If we want wages to go up, we cannot do it from this House. We cannot do it by passing a bit of feel-good law. We cannot sit around and pat ourselves on the back with self-satisfied smirks thinking we are helping the poor. No, it requires hard work to drive up wages, hard work from this place—from the Government. We need to be driving up wages, and ultimately the only thing that can do that is a more productive economy. Passing a law in this place to set a price for labour does nothing to improve the productivity of this economy. Setting a minimum wage does nothing to improve the productivity of labour. If it is effective, it actually excludes people from the market and makes our economy less productive, and the very people we are trying to help will be poorer now and poorer in the future.
We should be asking some basic questions: “What is it that enables people to get a job?”; “What is it that enables wages to go up?”; and “What is it that enables a country to prosper?” The answer is not in regulating prices, it is not in regulating wages and it is not in sitting here with a self-satisfied smirk saying: “Hey, look at us, don’t we care.”
I know that David Cunliffe is smarter than he appears by taking the mickey out of me for speaking out against minimum wages—he has been to Harvard; he knows the impact. He is just wanting to play a bit of politics by implying that I, who am speaking the truth, am suggesting that I am in favour of low wages. Of course not—someone who is speaking out against regulating prices is not in favour of a sweatshop. Someone who is speaking out about trying to regulate our way to prosperity is not a person who does not care. Someone who is speaking out against making a minimum price is not someone who says: “Let’s all help business and not care about the workers.” No, that is someone who is addressing the issue of what we need to do in the New Zealand economy to help our young people, not just today but tomorrow, next week, and in the years ahead. We should be looking at our economic circumstance—
Mr Cunliffe sits in a Government that is seeing interest rates driven up, workers laid off, and businesses shut down. He is in a Government that is unable to respond to that predicament. Solving the predicament is hard work. It requires a Government to take a good hard look at itself and not just sit there and play politics, not just sit there and take workers’ hard-earned money and spend it to try to win votes. It requires a Government that says: “Hang on, we do not need to spend this money here. It is nice to spend it here, but it would be better to lower taxes so that everyone has more money in their pockets.”
If we lower taxes, we get more investment, and therefore more capital, and it is capital and technology—as Mr Cunliffe well knows—that drive up wages. Capital and technology are what drive up wages because they are what make us all more productive. That is why, for example, New Zealand workers cutting hair or driving trucks get paid more than workers in, say, Fiji or workers in South Africa. It is not that they work harder, it is that they have more capital and more technology to work with.
The danger is that we are falling behind; we are falling behind on the capital and technology fronts and it is because we now have a regime operating that is too highly taxed. There is a huge fiscal stimulus going into the economy and driving up interest rates, and we have regulated ourselves so that people look at it and think it is all too tough. We in Parliament cannot understand the rules that confront small business. We cannot understand the rules, and yet we expect people in small businesses, whose job is not to understand the rules—that is our job—but to run their businesses, to understand the rules that we cannot understand.
That is what we are doing. What we should be doing is not piling up regulation upon regulation but doing the hard work to get this economy going. That is caring, because to care we have to deliver results. I tell the House that putting in minimum wage laws and driving up the minimum wage do nothing to increase wages. Thank you very much.
Dr WAYNE MAPP (National—North Shore) Link to this
It has been a very interesting debate this afternoon, and I think that Mr Hide has identified the core problem with the New Zealand economy—that is, productivity. The latest productivity figures for the economy actually show that things are going backwards. That is the reason why we are not doing as well as Australia. Our productivity is lower than Australia’s. There are a variety of reasons and Mr Hide identified two of them. He identified—
The economy is growing, but productivity is not—that is the difference.
The issues that were identified were technology and capital. There is actually a third reason as well, which is skills. That is built around education. It is clear that in Australia more is spent on tertiary education of all kinds than in New Zealand; a greater percentage of its GDP goes on tertiary education than in New Zealand. That is one of the reasons why John Key’s recent speech on trades and skills focused on building skills, particularly for those people who might otherwise miss out. If the Government wants to know why New Zealanders are listening to John Key, it is precisely because he is solution-focused. He has practical solutions for real problems and education is at the heart of it.
Why do I stress this point in relation to this bill so much? It is because National is concerned that the bill is effectively a perverse incentive. We want young people to stay at school or, alternatively, at least to be in trade training—to build their skills, and to make them more productive members of the community. That is where, in some respects, I would have to say that both Mr Hide at one end of the spectrum and, indeed, Mr Harawira at the other end of the spectrum miss the point. Of course there is a need for minimum rules around employment. National has no difficulty with that. We have always accepted that. We have never supported the position of employment at will. I know that many people will argue for that. That is not our position. That will be perfectly clear, and, indeed, has been clear over the years, in the nature of the employment legislation we put to the public for adjustment. [Interruption] As the Minister interjecting well knows, right through the 1990s there was always minimum wage legislation. That was protected throughout that period, and it is an important point to put on record.
However, we do not believe that this bill is the correct way forward. The first reason is the perverse incentive, and I want to focus on that point just a little bit more. As I said, we want people either in school or in trade training. By lifting the minimum wage for, effectively, 16 and 17-year-olds—members should remember we are talking about those 2 years only—we actually provide an incentive for some young people to make a choice to leave school and go to work. We say that that is a bad choice. We do not want that perverse kind of incentive in the system. We are not talking, after all, about the university student, or the person doing a 5-year trade training course; we are talking about vulnerable young people for whom it is most critical to build their skills.
I say to Mr Harawira in particular that the National Party’s approach, which was certainly clear from my 90-day probationary employment bill, was to provide the opportunity for young people to get ahead—to get out of unemployment and dependency and, essentially, into work. That will be a core part of our employment legislation going forward. I remind the Māori Party that I listened very carefully to its concerns at the time, and I prepared, I believe, a carefully thought-through Supplementary Order Paper for the Parliament at the time, which was supplied to those members in advance, so that in a sense the concerns they raised would have been fully covered. I have to say to members opposite, and to Judy Turner as well, that that was intended to be a moderate measure. I have to remind the House that New Zealand is the only country in the OECD that does not have probation periods. That is a far cry, I say to the Māori Party, from the era of Lord Wilberforce. So let us not take absurd analogies to ridiculous extensions.
The second reason that we are not supporting the bill is the deterrent effect it will have on employers. I heard many of the submissions. Naturally enough, most of the young people—not all, but the vast majority—came along and said they wanted the bill. I guess that is understandable. They were, in effect, the lobbyists for the measure, and people will always want the immediate advantage that they see. In contrast, virtually every employer—although I will not go so far as to say every employer, because some had a different view—said: “Hang on a minute, this bill poses a risk.” The risk is this. Common sense tells us that 16 and 17-year-olds are building experience, not just in the workforce but in life in general—in maturity, in understanding the adult world’s expectations, and so forth. It does not happen overnight. The whole point of having this introductory phase into work, when one is 16 and 17, is to get a chance to get that first job, for those people who make that choice—as unwise as it is for many of them.
Many of the employers were very clear in saying that if they had to pay the full wage, they would go for an older person. They said that it is not just the technical job skills that are required in that first 6 months; it is all the other things that a person acquires as he or she gets a little older—that is, maturity, judgment, reliability, and so forth. All of those things play their part. They may not be job-specific as such, but they nevertheless bear on the value of a person in the workforce. Many of the employers said that if this bill is introduced, it will actually reduce the opportunities for those young people to be able to get a job.
One of our own members, Mr Bob Clarkson, made this point very clearly. He said he wanted to give people a chance. He also said, during the debate on my 90-day bill, that he wants to give people a chance, but he needs incentives to be able to do that. He needs to be able to give people a go. The legislative environment has to be able to favour that in order for employers to give that incentive. He is saying to the Government and to the Green Party that, as well intentioned as these measures might be, it will be a deterrent for him to do precisely that. Is he going to take a risk on someone who has perhaps a difficult background in terms of minor lawbreaking and the like? Is he going to take that risk? He said he probably would not, but my 90-day bill would have given employers a chance to do precisely that; it provided the leverage up into the workforce that those people need.
It is the same principle here. National is taking a principled approach to this. We believe in moderate, reasonable employment legislation—in that sense we differ from our colleagues in the ACT party—but, similarly, we do not go to the other end of the spectrum, as represented by some of the other speeches given today. There is a sensible, middle way around these things, and National supports those middle ways.
Hon MARK GOSCHE (Labour—Maungakiekie) Link to this
The bill we are debating today is not the Employment Relations (Probationary Employment) Amendment Bill that the previous speaker sponsored into this House and that was soundly defeated, which it should have been.
This Minimum Wage (Abolition of Age Discrimination) Amendment Bill deals with the reasonably straightforward issue of whether we pay young people of 16 and 17 less than an 18-year-old or over, as the current law allows, or whether we take that discrimination away. The Transport and Industrial Relations Committee grappled with the opposing views and—as select committees should do in this Parliament—we listened to both views. In the fine balance that this reported-back bill shows, we have taken into account the strong opposition by some employers to doing anything, and have listened to their fall-back position, as I would describe it, of saying that there is a genuine need to deal with the 16-year-old who has never worked before and is coming into the workplace with none of the informal skills that they require, and that they think there should be a short period of time where they pay them a lesser amount. That is what this new entrants rate is all about.
I know there will be people who are disappointed. We had some wonderful young people come before the committee, up and down the country, and they put forward a very sound case. Many of them told stories about being employed in supervisory positions as 16-year-olds and being responsible for supervising people older than them, who happened to be eligible for the adult minimum wage, and there was no logic in that. That was unfair, and that is why the select committee has said those people should not be paid a lower rate.
I listened to some of the speeches made earlier—unfortunately, not all of them—and I listened to Rodney Hide’s final comments about complexity. Well, it is not complex at all. The facts are that everybody has to keep time and wage records. That is the law. Nobody thinks it is wrong. Nobody thinks it is onerous; it is sensible. Maybe the ACT party is alone on that one. If we are running a business, it is not hard to count up to 200. If we have kept a record of all the hours of work and they add up to 200, then we know that that person is then eligible for the full minimum adult wage. I do not think that is onerous. I do not think it is onerous to keep records of hours and wages. Those requirements are in the legislation, they have been there under various forms of Government, and they continue to be there.
The reason people are paid youth rates out there in some situations, notably the fast-food industry, is because the employers can do it. The law allows them to. Employers expect this legislation to be passed, and have been budgeting and preparing for it for a very long time. Some of them do not pay youth rates at all at the moment, because they choose not to. But some of them do it purely because of the competitive pressures of the fast-food chain down the road paying lower wages, even though they agree that their workers should get paid the minimum adult wage. In essence, this bill allows a level playing field. It does not give anybody an out by having a legal minimum wage for 16 and 17-year-olds, thus giving employers the excuse to pay lower wages.
The interesting thing about hearing submissions on industrial relations, as I have done for some years now, is that the employer organisations do what I think is a good job in that they go out and survey their membership up and down the country. They came and told us there was not a lot of interest in this bill from most of their membership, because those employers do not pay youth rates. I think about 85 percent of them do not pay youth rates. Who does? It is largely employers in the retail sector, the hospitality sector, and, most notably inside that, the fast food sector. Those people are concerned about this bill, but 85 percent of employers in New Zealand do not give a toss, because they do not pay youth rates. They do not see them as a necessary part of running their business.
When I think about the words of the previous speaker, Dr Wayne Mapp, who said that if we require employers to pay young people more, it will displace young people, I say we should look back at the last time that happened. When we brought the minimum wage threshold down from 20 years, which is what the threshold used to be, to 18, was there displacement? Were fewer hours worked by young people as a result of our doing that? The evidence before the select committee said, no, there was not. Nobody could give us any evidence to show that young people lost work, lost work opportunities, or had reduced hours as a result of the last move made by this Government in this area. I do not expect there will be this time, either.
Really, I think that the question that will be debated—and I know that it will be debated very fiercely at the Committee stage—is whether we should have the new entrants rate at all. I think the House should have that debate, because the select committee had to grapple with it, and it came to the majority view that members have now been presented with in the House to debate. I look forward to hearing the debate from those who, like the Māori Party members, would like to support the bill, but without this new entrants rate. I look forward to hearing that debate, because it is an important debate for us to have.
But I also think that this amended bill has a fairly broad amount of support across the political spectrum. In reality, the National Party, if it could get over the fact that it has been in Opposition so long that it has to oppose things just for the sake of it, would be supporting this bill. If those members were using their common sense, they would be supporting this bill. If they had actually listened to the submissions before the select committee, they would be supporting this bill on the basis that they would have done a bit of homework and found out that the unemployment rate out there 2 weeks ago, when I launched a report in Auckland on the labour market, stood at 1,227 for 18 and 19-year-olds, compared with 17,000 when National was last in power. Then David Benson-Pope, in the House last week, I think, reported that that figure had dropped to 990 unemployed 18 and 19-year-olds. If National members actually looked at those sorts of statistics and took notice of them, they would know that a bill like this will not have very much effect at all on young people in that age group in terms of whether they are in employment, education, or whatever, because most young people over the age of 17 are either in employment or in education right now.
The other question that National raised in its minority report is an interesting one. It is about whether this bill would encourage people out of education and into work because they would get the minimum adult wage. Again, I return to the evidence we heard about who is paying youth rates, and I do not think that a lot of young people will rush out of school tomorrow in order to get a job at McDonald’s because suddenly the adult rate is being paid. Young New Zealanders are brighter than that. They would go to McDonald’s and work part-time to get them through study and to help their families out whilst they were still at school, but I do not think they would rush out and leave their education behind because of a minimum adult wage being available to them 200 hours after they begin work. That could be in as little as 5 weeks.
To the critics of that new entrants rate, I say that the current situation is that a 16-year-old has to work for 2 years before getting the adult minimum wage. Under the bill, after about 5 weeks of full-time employment young people can get on to the adult minimum wage. That is really where the argument lies as to whether the select committee was correct in putting forward that amendment. That matter will be determined by way of a vote in Parliament as the bill goes through the Committee stage.
As I said, if National members were not just playing politics on every single piece of legislation that came into this House, if they started to engage the brain, read the evidence, and listen to the submitters—including the many employers that came before us—they would be agreeing with this bill, and not mucking around and being stupid about sensible legislation like this. As we know, living on $12 or $11.25 an hour, or whatever it might be, is a very tough struggle. Those workers who have finally got their boss, that lousy outfit called Spotless Healthcare Services, to pay them the wages that they deserve were living on $11 and $12 an hour. We as a Government think that is shocking, and that is why we put so much money into the public health system to fix that problem.
We do not think that people should be earning the minimum wage, full stop, in this country, but we must always have a floor that employers cannot go below. A huge number of workers never ever earned the minimum wage in this country, before the previous National Government brought in the Employment Contracts Act. We are fixing up the problem; bills like this one help.
DAVID BENNETT (National—Hamilton East) Link to this
It is my pleasure to speak on the Minimum Wage (Abolition of Age Discrimination) Amendment Bill today. I thank members of our Transport and Industrial Relations Committee for the work we have gone through in looking at this bill, and I thank the proponents of the bill for their work. We were certainly very pleased to see this issue come before the select committee.
All committee members took a great deal of enjoyment in hearing from the submitters. Some really successful people in business made submissions, but also some young people made submissions, and I will draw attention to the submission made by representatives of Young Labour. Actually, it was probably the best submission that was made. Those guys really did a lot of work on their submission, and it was a real credit to them. Even though it was slightly misguided in where they wanted to go, it was a very good submission and they presented it very well.
Today we have just listened to some arguments, and one argument made about discrimination I think we need to address at a very early stage in this House. This bill is not about discrimination. Drawing comparisons with Lord Wilberforce are unfair to Lord Wilberforce, as this is not a case where we have an upper limit on what someone can be paid. If we had a limit specifying that we can pay 16 and 17-year-olds only $5 an hour, then that would be discrimination. We have a lower limit; we do not have an upper limit. So there is no discrimination in the sense that the Māori Party has promoted today. I think that is something we need to look at, as it is fundamental to the employment situation out there. It is a matter of choice. Employers can choose to pay more than the minimum wage, and in a lot of cases, they do. We had submissions saying that 58 percent of some employers pay above the minimum wage. I think it is fundamental to look at the opportunity for an employer to recognise a good employee. If someone is good, the employer will reward that person. The employer will pay that person.
We come into this House and we talk about equality and we think of one big level playing field—well, members should have a look around at themselves. This is not a place of equality; this is a place that is all about hierarchy. We have members in the front row representing their time in this place. They get the jobs in the front row. Cabinet Ministers get paid more than backbenchers in Labour. It is all about hierarchy. How are we going to change that hierarchy? Are we to say that we cannot have that at the start of someone’s working career—it is all right to have a hierarchy in the later stages of one’s career, but it is not all right to have a hierarchy in the early stages? That just does not make sense. The reality is that whatever people do in life, they start in one position and work up.
Will this mean that young people getting their drivers’ licences will go straight on to full drivers’ licences? No, it does not. We make sure that people have to go through a whole system, and if anything, there is talk about extending the system so that people have more time under restricted or learner drivers’ licences. How can we say that in employment we now have to charge or be paid a certain amount that is at the highest level, when this would not happen in other areas of life? Will this mean giving 16 and 17-year-olds the vote? No; there are proposals to do it but they will not get very far, because we have some limits in our society.
We recognise some degree of growth. We recognise, especially in employment, degrees of success and how people progress through their careers—and their salaries are generally commensurate with that. That is the key thing; that is the basis of our society. We do that through our community and through our leadership in this place, and we do that through the wages we pay our people. We do that in all aspects of our society. To come in here and talk about discrimination is not true. This is not about an element of discrimination. This is a case where people are living the reality of how our lives are based—people have to go through structures to get to the success that they want to get to.
The second thing I think we need to look at, before we look at some of the arguments for and against the position, is the treatment of the Green Party. Those members came to the select committee with high ambitions. They were philosophically in the right place. They said that they wanted to have all of the stuff gone, but then Labour came back at the last minute and said no, we are going to have this 200-hour element. Labour stymied the Green Party, as it does time and time again.
If there is one lesson the Green Party needs to learn from this, it is that it cannot trust those Labour members. The Green Party had a good idea. Labour should have been backing the Greens all the way—it is full of unionists—and it did not. Then Labour came back and changed the bill. Labour brought in a 200-hour change. Labour changed its mind. It was backing the Green Party all the way, saying that this is a good idea, this is great; and then what does it do? It puts in this 200-hour element. One could see the Green Party members’ faces drop. It was the last thing they expected. Their dreams had gone out of the window. They do not want to support this bill now; that is how bad it is. They want to turn round and say no.
The Māori Party is in exactly the same position. Its members want to say no because they do not like the 200-hours change. Labour cannot have it both ways. If Labour wanted it, it should have done it the whole way, but it did not do that. Labour could not be there for the Green Party in terms of the pure philosophy. So that is something that has been missed out.
I will look at some of the other things in the bill. Employers generally pay what they want for staff. Employers make that conscious choice. However, the young people who came in front of the committee said that that was not the case. They have situations where, as a 16 or 17-year-old, they can be training somebody who is new, who may be a 20-year-old, and not getting paid the same amount. This is what the young people said. If they were 17 and had been working, say, at McDonald’s for a year, potentially a 20-year-old could come in and that 17-year-old would be paid less but would be training the 20-year-old. That is a very good argument. They were saying that they were not getting paid for the work they had done; that was the argument put forward. The reality is that employers make the choice to retain such people and if they want to retain them, they will pay them what they are worth.
We have a tight labour market out there. Employers need good staff. The hardest thing to find is good staff. As members of Parliament, we go around businesses and communities and every time we go into an employment situation, the first thing we are told is that the employer wants good staff. Employers will pay to keep the people they want. That is the fundamental basis of what is happening in our employment situation at the moment. If employers will pay that rate, they will recognise if someone is 17 and training a 20-year-old. They will take that into account in making the wage decision for that 16 or 17-year-old. So the market is achieving that already.
The other argument out there, and the one that Bob Clarkson put forward in a very good manner, was that people need a start; they need a chance, they need a break, they need to get in. How many people actually go and walk into their first job? I would say very few. Most people who get their first job have to do something special. They have to get their foot in the door. How many people in this Chamber have gone and worked for free to get some experience? I bet that people have. How many people here have gone out and given of themselves before they got a job?
Exactly; they have given to the Labour Party. They give before they get. And when they give, they get what they want; they get a job. They had to give for years working for the Labour Party with no payment and now they are in here; they got a job. So how can they say anything other than that? One has to give to get. What is the difference between paying a lower rate while people are giving and learning skills—[ Interruption] Now, people like David Cunliffe get to sit over there and talk about these things, because only the rich can think like he does. That is the reality of this world.
There will be a lot of other effects from this legislation. The minimum wage will go to $12 before we know it. That will hurt young people. The number of young people going into unemployment is so high. In fact, 12 percent of young people are unemployed, compared with the 3 to 4 percent national average. That is a big difference. If wage rates are increased to $12, that difference will be accentuated and young people will be put at a disadvantage. Time and time again, submitters came in and made that point.
There is the argument that this will be a disincentive for people to go into education, when that is what we should be promoting as a country. All in all, we say there are some problems with this legislation. We do not believe it is a matter of discrimination, and we have some pity for the Green Party, which went out there but did not achieve its full goals.
The ASSISTANT SPEAKER (Ann Hartley) Link to this
Just before I call the next speaker, I remind members not to bring the Speaker into the argument. If we had an honesty box with a dollar for every time the Speaker was brought into the argument, it would get a lot more than the minimum wage per hour.
DARIEN FENTON (Labour) Link to this
I am pleased to speak in support of the second reading of the Minimum Wage (Abolition of Age Discrimination) Amendment Bill, and I congratulate Sue Bradford on bringing this debate to the House. I also congratulate New Zealand First and United Future on supporting the bill as it stands. Also, as people will have noticed, the majority of the Transport and Industrial Relations Committee are recommending this bill. I think the select committee report does reflect the genuine consideration we gave to all submitters.
I want to acknowledge particularly all the young workers who came to the select committee to tell their stories. It was very entertaining at times. In fact, I think it was the first time I have been at a select committee meeting where we had submissioners telling their stories by mime. That was from the Radical Youth, and I think they told the story very well. I think there is no doubt that our future is in very good hands when we consider the leadership and passion of the many young people whom the select committee had the privilege of hearing from.
I think the majority of the select committee have agreed that the basis of the original bill is right, and that it does not make sense—nor is it just—to continue to pay workers less just because of their age. I think we all believe that age discrimination is wrong, just as discrimination on the basis of gender and race is wrong, and that it is not fair to pay 16 and 17-year-olds a lower minimum wage.
However, I do not agree that the bill as reported back entrenches discrimination. Our recommendation for the 200 hours means that workers get more pay once that initial experience of 200 hours has been gained—and it is worth noting for the Māori Party that it is not included in the bill; this is a recommendation to the Minister when she considers, after consultation with the social partners at the end of the year, recommendations on setting the minimum wage in the future.
The proposal for 200 hours makes sense to me because in my experience as an advocate for workers, paying workers for experience is quite common and many collective agreements often reflect just that. A worker gets paid more for the experience once he or she has worked for a particular time. It is called service pay. It might be a bit old-fashioned in the minds of some employers but it is something that workers feel very strongly about. I have had many debates with workers about that particular issue. They often say: “Why is it fair that someone coming into a job who is brand new should get paid the same as me when I’ve been here 2 or 3 years?”. That is how they feel about it. So the select committee’s proposal is talking about 200 hours of experience and being paid on the same basis once they have gained that experience. What is more, that experience can be accumulated across many different employers.
The other question that I think will come up as we go through this debate will be about whether those workers work 200 hours for 5 weeks as full-time employees or 200 hours for however many months for part-time workers. I have to say, again, that my experience tells me that workers will say it is unfair if some workers have to work 5 weeks as a part-time employee, working a couple of hours a week, and others have to do 200 hours as a full-time employee working for 5 weeks at 40 hours per week. I have tried to think through how that could be adjusted, but for me it comes back to a matter of fairness. We are talking about fairness and experience, and it is a hard issue, but it is something that I think many, many workers will be saying about this.
So what we are saying is that 16 and 17-year-olds who supervise other workers should not be paid a youth minimum wage. I think that also reflects that the bill as written actually locks in 80 percent for people who are new entrants. Some people may not be aware that the Minimum Wage Act does not say that young workers who are 16 and 17 years old should be paid 80 percent of the adult minimum wage. It is left to Governments and Ministers, and so on, and we all know what our experience has been of that. So it locks it in at 80 percent of the adult minimum wage, and that is a good thing.
One of the interesting things employers were telling us—and in fact unions were, as well—was that progress is being made on collective agreements on youth minimum wages. They are abolishing youth rates, and I say congratulations to the unions on running a campaign and getting employers to listen to it. What employers were really saying to the unions and to us was that they will not pay youth minimum wages provided their competitors are not paying youth minimum wages. I think we will see that change over time. If we look at the industries where youth minimum wages are paid, we see that they are in the supermarkets, in the retail industry, in the hospitality industry, and in jobs where young workers often do the jobs that adults will not do.
But it is also worth noting here that we are talking about minimum wages. We are not talking about paid rates as we would call them, as advocates in our past lives. We are talking about minimums—the minimum, below which no workers can be paid. We were told that most employers pay above the youth minimum wage. So what we are trying to do here is to deal with the most vulnerable; the workers who are most likely to be employed by employers who rely on minimum wages and who pay young workers less than they are worth.
One of things the select committee heard, which I think needs further consideration—it is not in the report back, but I think we do need to reflect on it—is the issue of workers under 16. Many of the submitters who came to the select committee talked about their lives as workers as 14 and 15-year-olds. Of course, the Government is currently considering ILO Convention 138, the minimum age convention. It is a tricky issue, really, as to what is the balance between enabling young people to work and raise a little bit of pocket money or money to support their study versus the minimum age at which people should be able to work. But it is an issue that needs attention, and I think it will continue to come up, but it was outside the scope of the bill.
The other thing that has not been mentioned in the debate so far is that although the author of the bill is disappointed in the result from the select committee, the response we have come up with is a world-leading one. I was very interested in hearing from various groups, including the Department of Labour, about which countries do not have reduced rates for young workers. It is very hard to find too many countries, actually. There is Cyprus, Estonia, Greece, Latvia, Slovenia, and Spain—so we are talking about being among, I suppose, OECD countries that are leading the world in this in being able to say we are making progress on removing lower rates for 16 and 17-year-olds on the basis of their age.
I want to make a response to Hone Harawira. He said in his speech that he would be voting against the bill. One of things that perhaps members do not understand is that this bill is an enabling bill. He will not find, when he goes through the bill, anything about 200 hours. As I have mentioned, the select committee proposal provides a recommendation to the Minister, but the Minister is then required to review the rates, to discuss that with its social partners, and to come up with a solution at the end of it. So I simply do not believe that the hundreds of young workers who submitted on this bill would prefer to continue to wait, for 2 years, to get their adult minimum wage rather than for 5 weeks or 200 hours as in the proposal that has come forward.
Finally, I would just like to say that the National Distribution Union, which has been very active on this particular bill, says in its press release today that it is urging Parliament to take the next step and vote for the second reading of this bill so we can continue the debate. I think it will be a real shame if members like those in the Māori Party vote against it, because all that will do is ensure that the injustices we have at the moment will continue in their current form. Thank you.
KEITH LOCKE (Green) Link to this
It is somewhat disappointing, after my colleague Sue Bradford put this bill in, and after it got though the first reading and went on to the Transport and Industrial Relations Committee, that the bill has been rather gutted at that committee. It is very much a fifty-fifty sort of bill, a half-hearted bill, in the way it has come back from the select committee. It is very unfortunate that the Labour Party choked at the critical moment of putting it though in its original form. We had a real chance to abolish completely, in minimum wage terms, the injustice that has been done historically to 16 and 17-year-olds.
There was every reason for the select committee to come out with a clear position in favour of the bill. We had legal advice, given to the Attorney-General, stating quite clearly that to continue this age discrimination would be against the New Zealand Bill of Rights Act—that, in essence, the bill was illegal. Secondly, the entire trade union movement—including the Council of Trade Unions—which historically the Labour Party has some association with, was fully for the bill in its original form, and the Labour Party has alienated the entire trade union movement by having this compromise—
I think there is a certain embarrassment there, because those members know that that is true. The Green Party has stood alongside the trade union movement on this; the Labour Party has not. The unions are not just formally in a position; they have conducted rallies and campaigns, high school students have mobilised, and there have been student strikes. There have been all kinds of things supporting this bill to get rid of youth rates completely. As a result of this campaign, certain industries like BP, McDonald’s, and Postie Plus have conceded full rates. They have got away from youth rates, as a result of the campaign by unions that has run alongside the bill.
And these unions are not giving up. Darien Fenton, who spoke before me, referred to the press release put out today by the National Distribution Union—a union of which I am a proud member. The National Distribution Union, along with Unite! and the Council of Trade Union’s youth movement, has set up a website, called www.endyouthratesnow.com, to help people to mobilise to get this bill through in its original form, and to make sure that in its Committee stage it is improved. That youth movement, those unions, and others, will be having a march and a rally, on Saturday, 11 August, leaving from Britomart in Auckland at 12 noon. It would be good if some MPs went there, participated in that rally, and steeled themselves for the Committee stage in order to move amendments to get the bill back to its original form.
I refer to some of the myths that surround this bill. The first is that somehow young people are low-quality labour. Nobody is saying that experience does not count for something, but we all know that in a lot of areas of the economy, particularly where there is some level of computerisation and information technology involved, young people of 16 and 17 years of age are much more on to it—they are much quicker to learn—than are people who are, say, over 30. That is why young people are often chosen as casual workers in the fast food industry and in supermarkets. Employers know that they will be on to it more quickly than most of the older people. Young people are not poor quality labour. The idea that somehow profits will suffer if young people are employed on full rates is quite wrong.
As Mark Gosche rightly pointed out, 85 percent of employers do not go for youth rates. It is mainly in the fast food and retail industries where those rates apply. The reason—and Darien Fenton reinforced this, as well—is the competitive pressures in those industries; it is not some basic cost structure in the industry itself. If one lot of employers goes for youth rates, other employers think they have to follow suit for reasons to do with competition.
I think it is quite wrong to say—and I am glad that Mark Gosche also said this—that young people are suddenly going to leave school early and go out and get full-time jobs at age 16 if youth rates do not apply. It is disappointing that the Government put out a press release today talking about the “possible negative impact” of an incentive for 16 and 17-year-olds to leave school early, with fewer qualifications. I think Mark Gosche put the lie to that, correctly, in his speech. In fact, we could look at it in another way. If there are no youth rates, then people who are going on to, say, universities and institutes of technology, etc., will have more from their part-time earnings to support them in their studies. They are more likely to be able to afford to continue in education, not less likely. There are not too many people, as I think Mark Gosche mentioned, who will go out and forgo any possibility of a career, and the education towards it, for $450 a week on the minimum wage.
There is the whole question of “new entrants”. This bill is called a new entrants bill; whereas, as has been pointed out, a lot of people at 16 are not necessarily new entrants into the workforce; they may have done odd jobs previously. There are all kinds of problems relating to the 200-hours qualification period. I thought from the debate that the 200-hours qualification period was mentioned in the bill, and I am sure that a lot of people who have been listening to the radio will think that this bill contains a provision about a 200-hours qualification period before young people go on to full rates. It is nowhere in the bill; it is only in the commentary, where there is a recommendation to the Minister of Labour, saying: “Dear Minister of Labour, you might consider this 200 hours.”
Unfortunately, Labour members seem to be arguing both ways on this. On the one hand, when they are criticising Hone Harawira they tell him not to worry because the 200 hours is not mentioned in the bill; on the other hand, when they are arguing to get United Future’s support, or whatever, they say that the 200 hours is mentioned as a strong recommendation. So it is sort of an argument both ways, but I do take Darien Fenton’s point that we still have the Committee stage to come and we can still work our way through this to a better result.
The 200 hours matter is going to be a mess. It covers any employers young people might be working for in that first 200 hours after they turn 16. If they go through a number of employers, then keeping all the paperwork and being able to check it will be difficult, and if there is some question mark or matters of legal cases, then it is all going to be a total mess—a bureaucracy for anyone in the Department of Labour who has to check it all. It will be a nightmare for employers and everyone else—and for what purpose? As the National Distribution Union has indicated, the average person will be 5 months in part-time work to achieve the hours, going through different employers. It will be a mess. It is not a fair system.
What this will lead to, really—and Hone Harawira used the term “youth slavery”—is that young people will be treated as second-class citizens, all for the cost of a few dollars extra from employers. Employers can afford it, but young people cannot afford being without those dollars, particularly at their stage of life. It is a new form of discrimination being created unnecessarily.
There is a positive side to the bill, of course, which is why the Greens are supporting it. It retains a lot of what was in the original bill, but this complication, this rotten compromise, only mucks it up. Hopefully, we can end that in the Committee stage.
Darien Fenton mentioned other countries, such as Spain, Greece, etc., where youth rates have been abolished. Sure, those countries may not be the main OECD countries in terms of gross national product, but we should be following best practice. I think the Green’s aspiration is that we should be modelling best practice in our labour relations. I think that all National’s talk about how having youth rates is important for productivity, and everything else, rings rather hollow in fact. It is not respecting the rights of young people.
The Greens respect the rights of young people. We should respect the 16 and 17-year-olds who are contributing—we meet them in the supermarkets day by day. We should defend their rights and we should defend the union movement and the activities that these young people have taken to achieve support for the bill. I think that it is a bill we should all support.
A party vote was called for on the question,
That the Minimum Wage (Abolition of Age Discrimination) Amendment Bill be now read a second time.
Ayes 66
- New Zealand Labour 49
- New Zealand First 7
- Green Party 6
- United Future 2
- Progressive 1
- Independent 1 (Field)
Noes 55
- New Zealand National 48
- Māori Party 4
- ACT New Zealand 2
- Independent 1 (Copeland)
Bill read a second time.name changed to Minimum Wage (New Entrants) Amendment Bill