Minimum Wages To Increase – A Fairer Deal For Youth

New Zealand workers on the lowest rates of pay will receive an income boost in 2001, Minister of Labour Margaret Wilson and Youth Affairs Minister Laila Harré announced today.

The Government has agreed to increase the adult minimum wage by 2% to $7.70 an hour, lower the age of eligibility for the adult minimum wage from 20 to 18, and increase the youth minimum wage for 16 and 17 year olds to 70% of the adult minimum wage that is, $5.40 an hour in March 2001, and to 80% of the adult minimum wage, that is $6.15 an hour in March 2002.

The current minimum wage is $7.55 an hour for employees over 20. For workers aged 16 to 19, the current minimum wage is $4.55 an hour (60% of the adult rate).

The coalition has also agreed to replace training exemptions with a training minimum wage at the rate applying to 16 and 17 year olds - $5.40 next year and $6.15 in 2002 .

At the moment employers are exempt from paying minimum wage rates if an employment agreement includes a certain level of relevant training towards a qualification registered on the National Qualifications Framework.

Margaret Wilson and Laila Harré said the minimum wage rate is being increased by the amount of average wage growth in the past year.

"Lowering the threshold for the adult minimum wage to 18 will help ensure that low-paid young people receive wages that are fair," the Ministers said.

"These improvements bring the age of eligibility for adult rates into line with other policies for youth, particularly the community wage and New Zealand's obligations under the United Nations Convention on the Rights of the Child."

An increase in the adult minimum wage to $7.70 an hour will mean wage increases for around 7000 people. The lowering of the threshold for the adult minimum wage will affect about 9000 18 and 19 year olds, and increasing the youth rate to 70% of the adult rate will mean pay rises for about 4,500 16 and 17 year olds.

The changes will come into force on March 5 2001.

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