News of the finance and information workers union
Return to Flash contents | Next Story | Previous Story | Flash Archives
March-April 2006
Letter to the Editor
Let the market decide youth rates
Earlier today a pink flyer was handed around to alert people to the “youth rates rally” being held by Finsec tomorrow (14/02). The flyer made a lot of the fact that youth minimum wages are lower than adult minimum wages. The problem is not that youth minimum wages are too low compared to adult minimum wages but rather that minimum wages in general affect the lowest paid the most and they have the most to lose.
It is true that youth minimum wages are lower than adult minimum wages. However what do wages actually represent primarily? In the most basic terms the value of an employee’s work to an employer.
With this in mind you cannot overnight increase the value of an employee’s work by raising the minimum wage - youth rate or otherwise. Otherwise why not raise the minimum wage to $50? The value of wages is best left to the market to determine, not politicians – even friendly ones like Sue Bradford. If you think you are getting underpaid then you can ask for a pay rise or leave your job. If you, as an employer get few people joining your workforce then you will need to consider raising wages to a) prevent people from leaving and b) attract new workers to at least replace those who leave. Wage rates rise on their own without government intervention.
And who says the arbitrary $12 per hour is the magical number that people should be paid? What if the value of the work done by these people is less than $12? Think of it this way, you probably would not let Sue Bradford determine the minimum price of CD’s and which ones you should buy because you know what individual CD’s are worth to you.
Are we doing lower-paid people a favour by saying they can’t be employed for $8 and instead must be unemployed? What we are effectively saying with rates of $12, is that if your work is worth less than that then you won’t have a job. Or at the very least there will be fewer jobs to go around. Great for those kids that just want a bit of money for the weekends eh?
Finsec says their campaign for higher minimum wages is about fairness. Fairness to whom? Those sections of society who would be unemployed due to arbitrarily high wages rates, relative to the value of the work? Those employers that struggle to pay their staff at the moment, often going without pay themselves in order to do so? Fair is letting individual employees choose which employer offers the best options for them in a competitive labour market, and letting employers choose who best meets the requirements they set out when they hire people.
Mike Collins (non-member)
If you have got an issue with or for Finsec, let us know. It might be a letter, or even an article. Keep it to 200 words if you can and include a real name and address. Email stephen@finsec.org.nz, or write to PO Box 27-355, Wellington.
