The Fix

WAGE EXPLOITATION of children led to the enactment of the Employment of Boys or Girls without Payment Prevention Act in 1899. This was the culmination a long struggle by the Liberal Government to redress wage exploitation highlighted by the 1890 Sweating Commission. The Liberals regarded the legislation as a moral and progressive success. Alongside and subsequent to the statute, the Liberals and the First Labour Government developed a wage regulatory system that provided substantial minimum wage protection for almost all workers likely to be vulnerable to exploitation. And yet, Parliament had to revisit the issue in the early 1990s. The once-provided protection had completely disappeared. This essay describes the disappearance of the protection of young workers from wage exploitation and why the issue needed to be revisited.

As part of the description, the essay touches on issues of class and gender and a contest between right and left. The views expressed in this contest reflected, from the right, advocacy or implicit support of free-market capitalism and social conservatism, and from the left, New Zealand’s tradition of humanist liberalism. The issues and contest are seen largely in the context of the political domain and as it relates to control of the statutory framework. The essay draws on material available in government reports and parliamentary records but also takes advantage of a significant body of secondary material relating to the history of the arbitration system and the reforms of the 1980s and 1990s. Much of this secondary material is uncontroversial as it relates to the wage exploitation of children.

The legislative framework protecting young workers for the first half of the twentieth century consisted of two main components. The part of greater general significance was the development of the award system. While statutory minimum wages provided an absolute floor for wages in specific industries, minimum award wages came to provide the actual wage floor for most workers likely to face wage exploitation. A new general minimum wage statute was also enacted following the end of the Second World War, but it excluded young workers. The fact that this new statutory minimum wage covered only adult workers was to have significant implications for young workers in the early 1990s.

The development of the award system was a profoundly effective and enduring means of supporting wages over the course of much of the twentieth century. The system evolved out of the Liberals’ innovative Industrial Conciliation and Arbitration Act 1894. The statute enabled unions to register and effectively force employers to negotiate and develop award documents that set out enforceable terms and conditions of employment, including minimum wages, for specific work. At times, the Arbitration Court also issued general notices that provided a minimum rate for all awards. The coverage of this system generally grew for most of the twentieth century. A major reverse occurred in 1932 during the Great Depression when the right-wing Coalition government largely removed the right to arbitration. The following Labour government, elected in 1935, restored the right and also introduced compulsory unionism, which effectively ensured general award coverage for most workers. There were subsequent changes to try to weaken compulsory unionism during the following 50 years. These occurred in 1961, 1976, 1982 and 1983, all under National governments. The changes had very limited impact, however, and, except for a brief period, some form of compulsory unionism continued until 1991. By 1945 unions covered over a quarter of a million workers and exceeded half a million in 1979. As percentages of the labour force, unions covered 56% in 1973, 61% in 1978 and 64% in 1983. Significant groups not effectively covered by awards or similar arrangements were managerial staff and agricultural workers, and outworkers after 1981.² The longevity of the arbitration system at least partly reflected the advantage to government and employers of the general order and stability it brought to industrial relations up to the 1970s.³

Specific statutory provisions protected some youth wages in the absence of award coverage. These provisions developed incrementally through to the middle of the century. The initial Employment of Boys or Girls without Payment Prevention Act was superseded in short order...