Eligible 16 to 19-year-olds will be paid no less than $10.80 an hour, or 80% of the minimum wage, which is $13.50.
Labour Minister Kate Wilkinson said the new starting-out wage would help some of the youngest and most inexperienced workers get a much-needed foot in the door in a tight labour market.
Middle New Zealand is starting to feel nervous about the number of mass redundancies being announced on a regular basis. Although the Ministry of Business, Innovation and Employment estimates that the starting-out wage will create only 2000 new jobs for 16 to 19-year-olds in its first two years, it is a sign the Government is starting to take job creation more seriously.
The starting-out wage was one of National's 2011 campaign promises and its release comes at a convenient time for the Government, with the Engineering, Printing and Manufacturing Union planning to hold an emergency jobs summit in Auckland on Friday.
The Government is sure to attract much flack over the continuing loss of manufacturing jobs, the high value of the New Zealand dollar and the exodus to Australia of tradespeople looking for work.
Prime Minister John Key was not invited to the summit but said he would not attend even if he had received an invitation.
He used a media opportunity in Auckland on Monday to dismiss accusations that the country's manufacturing sector was in crisis.
The latest BNZ-BusinessNZ Performance in Manufacturing Index is released tomorrow and will provide details about the state of the industry in September.
Business NZ chief executive Phil O'Reilly said a starting-out wage would help get more young people into jobs.
Having to pay unskilled teenagers at adult rates made it hard for many young people to get a job.
Not being able to get that initial job prevented many young people from gaining workplace skills, further reducing their future employment chances, he said.
The policy would particularly benefit teenagers who were vulnerable to being trapped on a benefit through being unable to compete effectively for a first job.
Costings indicated that with accommodation and other applicable subsidies unaffected, a teenager on a starting-out wage would earn more than on a benefit, Mr O'Reilly said.
"Getting more young people into jobs - especially including those currently on a benefit - will benefit the economy and communities all through New Zealand," he said.
Green Party co-leader Metiria Turei was scathing of the what she called a return to youth rates. The proposal to reintroduce pay rates for young workers was another mechanism to deliver cheaper labour to employers and it was discriminatory.
"Rather than offering young people a bright future, through skills and training, youth rates are about undercutting all workers' wages by ripping off young workers," she said.
Labour Party leader David Shearer said paying young New Zealanders low wages would see them saving up their $10.80 an hour for a plane ticket to Australia.
He claimed that nearly 22,000 young Kiwis aged between 18 and 30 had moved to Australia this year looking for better jobs and opportunities.
Paying lower wages would drive more of them offshore, Mr Shearer said.
However, figures supplied by Ms Wilkinson showed more than half the OECD countries had some form of a youth wage, including the United Kingdom, France and the Netherlands.
The New Zealand starting-out wage was set at 80% of the adult minimum wage. That compared with youth rates that were 80% of the adult minimum in France but 60% in the UK and as little as 48% in Australia for 16-year-olds.
Who is eligible
16 and 17-year-olds in their first six months of work with a new employer;
18 and 19-year-olds entering the workforce after more than six months on a benefit;
16 to 19-year-old workers in a recognised industry training course involving at least 40 credits a year.
