The Government's new "starting-wage" scheme is "grossly unfair" for teenage workers, a spokesperson for a youth union says.
Labour Minister Kate Wilkinson yesterday announced a Minimum Wage (Starting-out Wage) Amendment Bill which will see eligible 16-to 19-year-olds paid no less than 80% of the $13.50 minimum wage rate, and will effectively double the time workers can be on the Government's training wage to six months.
It will not be compulsory but will apply for six months and about 40,000 teens will be eligible.
However, convenor of youth movement union Stand Up, James Sleep, told TV ONE's Breakfast this morning that the new scheme will only work to place a burden on young workers "and cut the wage by up to 20%".
"It is unfair that the Government could place the burden on young people and cut the wage by up to 20%," said Sleep.
"This announcement is grossly unfair to the next generation. Young people have had no role in creating this economic downturn that has caused youth unemployment."
He also said that even though the scheme may create around 2000 jobs, he thinks it will drive young people "into poverty".
"$10.80 an hour is not a living wage," he said.
Sleep also suggested that the scheme is discriminatory towards young employees.
"Sixteen and seventeen year-olds are facing the rising cost of living too. They are paying for things that other workers are paying for," he said.
According to Sleep, the youth union is also concerned that a small group of employers may exploit the scheme in order to get cheap short-term labour.
"We are concerned that a very small group of employees will use this to simply hire cheap labour, rather than put the investment into young people - at the expense of young workers," he said.
A spokesperson for a group which provides support for businesses in the retail sector believes the "starting-wage" scheme will make teenagers "more productive".
Louise Evans McDonald, from the NZ Retailers Association, told Breakfast this morning that the retail sector is looking forward to the introduction of the initiative.
"When the youth rate was abolished, we did highlight at the time that we were concerned that youth workers in particular would be affected, and we are looking forward to the reintroduction, and more youth coming back into employment" she said.
Evans McDonald said that the new starting-out wage will give more of the country's youngest workers a foot in the door.
"It is going to give employers an opportunity to take staff on, 16 and 17 year-olds, because some of the risk factors are mitigated by the cost."
However, she rejected the idea that youth employees would be more likely to lose their jobs when their wages went up to the normal minimum wage after six months of working.
She said that employees were likely to give a high level of productivity in the first six months, and it would be unlikely that employers would want to waste the time and energy that they have invested by starting over with new employees.
She also said that the new lower wage was not discriminatory.
"It's not discriminatory, or anything like that. What it's doing is giving an opportunity again for these people who have been out of the workforce for 6 months or greater.
"This rate is a fair reflection to the extra time and support that is being put back into that employee," she said.