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At a meeting in Dunedin on Thursday, attended by Social Development Minister Paula Bennett, Mr Cadogan outlined the success of his Ready, Steady, Work course, a programme that helps young beneficiaries find work in Clutha businesses.
''We are seeing good, young kids being expected to do the 80 hours work [a week] for a guy earning $300,000 and they're on a $24,000-a-year salary. It works out to about $6 an hour,'' Mr Cadogan said.
The Clutha region had ''blossomed'' with dairy farms but given what he had witnessed, he would not be contacting the dairy sector as potential employers.
The media often misreported that youth avoided employment in the dairy sector because they were ''lazy'', when they were avoiding the sector because they were being ''abused'', he said.
''The first year we did it [the course], we went to the dairy sector.
''We won't go there this year. We're not going to do that to the kids.
''Why should we have a kid working 80 hours for $405 in the hand?''
Last year, he approached potential employers in Clutha and then asked the 85 unemployed people aged under 24 in the district to attend a five-week course in November about ways to secure a job.
He would keep running the courses until all unemployed youth in the district were working.
''I'm getting told it's unrealistic. Well, no, I think it is [realistic].''
Southern Cross Forest Products human resources manager Kay Solomon said the pine remanufacturer employed people from the first course and their performance had been ''amazing''.
Ministry southern regional commissioner John Allen said most of the unemployed youth in the southern region were living in Dunedin and the city needed to find a leader, like Mr Cadogan, to find a community solution.
''The community wrapped around Bryan and the success story was just amazing and that's not happening anywhere else.''
Federated Farmers Otago dairy spokesman David Wilson, of Henley, said he was disappointed and surprised by the comments.
Remuneration on farms often included non-monetary benefits, so it was hard to judge whether a worker was treated fairly solely on the basis of pay, which often formed part of a package.
Communication during recruitment was crucial, as not everyone was prepared for the long working hours customary on farms, he said.
Farmers did not work a 40-hour week, and workers' ''expectations'' needed to include working much longer hours.
Mr Wilson said he had not heard of any exploitation, and if there were cases of abuse, they should not be tolerated. It was a diverse sector, with many different working arrangements.
Contacted yesterday about Mr Cadogan's concerns, Ms Bennett's office at first did not respond to the emailed questions, but issued a statement expressing support for the Ready, Steady, Work programme.
When pressed, a spokeswoman said ministers could not make ''judgement calls'' about ''anecdotal comments''.
''Seems a shame to ignore everything else, including the success of local people and focus on the one negative thing said at the meeting, but that's your call,'' the spokeswoman said.