Tuesday, 11 December 2007

Stopping youth employment

From the I file labelled, 'See, I Told You' comes this news:  "Supermarket employers have been advised not to hire junior staff ahead of minimum wage legislation coming into force next April," says a Picton supermarket owner.

Picton Supervalue owner Casy Smits [said] that at a meeting Christchurch Progressive Enterprises had advised its supermarkets to stop employing junior staff because of increased pay rates.  The Minimum Wage (New Entrants) Amendment Bill allows a qualifying period of three months or 200 hours work for 16 and 17-year-olds who will then move on to the adult minimum wage.  Smits said they were talking about pay rates of $13.60 an hour. "A 16-year-old is going to get nearly $14 an hour -- my checkout staff at the moment get about $12 an hour," Smits said.

Nothing like ensuring youngsters are kept off the ladder to employment altogether, is there.

The really sad thing is that there is nothing prescient in predicting this stuff.  It's just basic common sense.  Shame introducing and agitating for it wasn't.  Take a bow Laila Harre, Matt McCarten, Sue Bradford and their various paid apologists around the traps*.  I hope you feel proud.

*One of these paid apologists, Tane Wilton of the EPMU, told me back in August, "Peter, I'm amazed you lot keep trotting out the tired old line that increasing minimum wage rates necessarily leads to unemployment. If done sensibly, this is demonstrably false..."  Not just false, but demonstrably false.  Well done, Tane.  You get an 'F.'


  1. That would be the same Tane Wilton of The Sub-Standard who is mates with the troll Robinson/Robinsod whose real name is Michael Porton.

    Abusive union thugs!

  2. Peter, Progressive is just making a political point. You know that as well as I do. It will be very interesting to see the stats in a year or so - just as with the adult minimum wage I doubt you'll see any significant decline in employment.

    And yeah, keep saying I work for the EPMU if it pleases you (twice today, I notice). I've also had Finsec, the CTU, the 9th floor, the Labour Research Unit and the Greens, so it's something I'm used to. It is kind of pathetic though, don't you think?

  3. Tane, I have two questions for you.

    1. You've shown in commenting on this issue over various posts that you don't accept reasoned argument that youth rates increase youth unemployment; you don't accept research demonstrating that youth rates increase youth unemployment; and now you confirm that youth rates increase youth unemployment. Could you please let us know what evidence opposing your position you will accept, if any.

    2. So are you saying that you aren't a paid employee of the EPMU?

  4. Peter,

    1. There's plenty of evidence that sensible increases to minimum wages do not increase unemployment. Unemployment in NZ is less than half what it was under National yet the minimum wage has increased by more than 60%. How do you explain that?


    2. Um, where I work is really none of your business and your obsession with it is getting a little creepy.

    I could go through a process of elimination and confirm or deny every rumour that the right throws at me, but NZ is a small place and that's a game I'd rather not play.

    Why don't you start debating the issues rather than the man?

  5. "Why don't you start debating the issues rather than the man?"
    In NZ (and elsewhere) the issues and the man are often inseparable.

  6. And Helen and co are willing enough to attack the messenger rather than the message. In fact it might be described as a core Labour tactic.
    To sea a lefty bleating about playing the man is hilarious.

  7. Tane said...
    Progressive is just making a political point.

    So, if someone is making a political point, then that says it is meaningless. No, a political point means to make a statement about your dissatisfaction with the state's interference. If there was no state interference in the first place, then private businesses, be it Progressive or anyone else (forcing them to raise the minimum wage) wouldn't make a political point. How else you gonna show your dissatisfactions & frustrations if you didn't participate in the EFB recent march or air your view against the minimum wage to the media? Exactly as you said it, make a political point.

  8. Oops. Question one somehow got munted in transmission.. It should read:

    1. You've shown in commenting on this issue over various posts that you don't accept reasoned argument that youth rates increase youth unemployment; you don't accept research demonstrating that youth rates increase youth unemployment; and now you confirm that you don't accept empirical evidence either that youth rates increase youth unemployment.

    Could you please let us know what evidence opposing your position you will accept, if any.

  9. Tane, first, I don't think it's possible to reliably accept unemployment figures used by this government. See my post earlier today about them being spun.

    Second, as I've explained to you many times, inflated youth rates will tend to increase youth unemployment over and above what it would be otherwise. Not from some arbitrary start point (and here it's irrelevant which of the two tweedledum parties is in power), but over and and above what it would be without artificially inflated rates.

    Fact is, making it illegal to pay certain rates for some jobs means there will be fewer of those jobs.

    Fact is, if youngsters aren't sufficiently productive to get hired at the inflated rates you and your colleagues specify, they won't get hired.

    Fact is, you don't care about that, and neither do Bradford, McCarten or Harre. In their mind it's more important to politicise another generation of youngsters.

    "Why don't you start debating the issues rather than the man?"

    From you, that has to be a joke, right?

  10. FF: Actually, FF, Progressive makes an economic point. It's Tane and his colleagues who make that a political point by trying to repeal basic economic laws by political point-scoring.

  11. Tane

    One of my clients was going to employ two juniors and train them up. It was understood that the juniors would begin by undertaking the low value jobs and as they developed skills, and started adding more value to the company, they would receive promotions and wage/salary/bonus rises. The customer recently calculated that it was no longer affordable to employ the youngsters. I was asked to check the assumptions and calculations. My customer is correct. Her business can't afford to do it.

    Therefore two young NZers will not be employed or trained. Her skills will not be passed on to New Zealanders. So that's at least two young people you've disadvantaged. Oh well. They can always go on a benefit or govt make-work scheme.

    Here's the rub. There are other young people off-shore who are getting the training, gaining the skills, aquiring the disciplines and earning money- all while undertaking productive work. They will own the future, no doubt about that. Thanks to you and yours, NZ kids may end up cleaning and cooking for them. Perhaps they won't even be up to doing that! Whatever the case, the future of this place is as a colony of somewhere else (o/seas owners). Well done Tane!


  12. Yes, it is a sorry state of affairs when it comes to this ..leading to an increase in unemployment.

    What is required is the total abolition of minimum wages and let employers pay someone what they are 'worth', rather than what Communist trade unions decide someone is worth.

    So Tane is a trade unionist? gosh...what a bore :(

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  14. Statistically minimum wage does not increase youth unemployment to any great extent. Tane is right there. It hasn't in the US either.

    What is DOES do is transfer wealth from the poor to middle class teenagers. Even worse, there is evidence that whatever job losses there are fall disproportionately on minorities and women, the groups most likely to be dependant on the minimum wage to support themselves.

    Only about half of the people earning the minimum wage are adults; the rest are teenagers -- many of whom come from relatively affluent families. For example my 16 year old son uses his money to do up his car. It is no matter to me what he earns as I supplement it.

    Most people working at minimum wage are supplementing their studies, or their spouse's income, rather than trying to support themselves with such a job. So in order to get to the relatively small number of people who need the money, we provide a subsidy to those who do not. This is not very efficient social policy.

    Also tell it to all the Special Needs people who were put out of work and Sheltered Workshops closed down because of minimum wage requirements.

    Another example of caring for the poor in a Mother Teresa kind of way...

  15. Anon said...
    Statistically minimum wage does not increase youth unemployment to any great extent.

    Would you care to point out any peer review study about your assertion?

  16. The stats in NZ speak for themselves. The job market is tight, and my lazy-ass kids would not get out of bed for minimum wage.

    Here's something from the US http://aspe.hhs.gov/hsp/lwlm99/turner.htm

    I don't disagree with my homey here - the minimum wage is not helpful. Going from goofing off to having to concentrate, focus and work for 8 hours is a huge transition. Teenagers show up and want to stand around talking to each other instead of working.

    Minimum wage jobs allow kids to make mistakes and learn without wrecking their career.

  17. Here is a paper by Neumark and Washcher which is recent that showed that indeed, view that minimum wages cause employment losses among youths, so Anon and Tane, you're quite both wrong.

    We estimate the employment effects of changes in national minimum wages using a pooled cross-section time-series data set comprising 17 OECD countries for the period 1975-2000, focusing on the impact of cross-country differences in minimum wage systems and in other labor market institutions and policies that may either offset or amplify the effects of minimum wages. The average minimum wage effects we estimate using this sample are consistent with the view that minimum wages cause employment losses among youths. However, the evidence also suggests that the employment effects of minimum wages vary considerably across countries. In particular, disemployment effects of minimum wages appear to be smaller in countries that have subminimum wage provisions for youths. Regarding other labor market policies and institutions, we find that more restrictive labor standards and higher union coverage strengthen the disemployment effects of minimum wages, while employment protection laws and active labor market policies designed to bring unemployed individuals into the work force help to offset these effects. Overall, the disemployment effects of minimum wages are strongest in the countries with the least regulated labor markets.

    The full paper is downloadable from here:


    So, anyone who supports the minimum wage legislation, see if you can refute the finding of the study shown above. Show us that their methodology is wrong, and state what would be the correct statistical analysis techniques that the authors should have used, if theirs were wrong algorithms.


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