Two on the minimum wage – the National Party on their April fools day increase (I pick $13.00) and Labour on a bill to take it to $15.
Two on the minimum wage – the National Party on their April fools day increase (I pick $13.00) and Labour on a bill to take it to $15.
This entry was posted on Wednesday, January 27th, 2010 at 9:15 am and is filed under economy, labour, low pay, national, politics, productivity. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Trevor, I cannot but think that you and the Labour Party are being anything but opportunistic with this policy. Raising the minimum wage will have an impact in these times of growing unemployment. $15 per hour will not help the economic recovery. Small business will struggle and downsize.
How will this help some young guy for whom experience is more important than dollars (at this stage) if he cannot even get a job because it is not economically viable to employ because of the $15 per hour plus 4 weeks annual leave, plus Kiwisaver, plus the raft of other expenses that actually go with employment of waged workers?
Spud I have deleted your two subsequent comments on this post. You are on rations. Stick to them. Trevor
I am delighted that Labour is supporting a rise in the minimum wage to $15. I get very angry when business people bleat about tax and bludgers without acknowledging the fact that a great deal of tax is spent on subsidising low wages, through WFF, accommodation supplements and so on. Recently, Pascal’s Bookie put up an OECD graph at the Standard, which shows that we are in the top half when it comes to high earners, and the bottom half when it comes to low earners. Clearly, catching up with Australia, if we are serious about it, ought to begin at the bottom end.
It’s $12.75. One of the advantages of blogs is they’re meant to be able to keep up to speed!
Yaay!! Well done on the Minimum Wage bill. Makes me happy.
Good move Trevor. Great to see.
Typical opposition party – whine about the government not doing something you yourself had 9 years to do. What hollow actions from Labour proposing a members bill on increasing the minimum wage to $15. Weren’t you Labour Minister up until just over a year ago Trev??
Why so high Trevor? Your proposal is above the level of inflation or average wage increase percentage.
Or is this just trying to look good knowing that it will never get past first reading even if it gets drawn?
No fizzleplug, it is not about looking good, it is about core Labour policies.
Over their nine years in government, Labour was commited to raising the minimum wage from $7 an hour, a level the Shipley government thought was appropriate, to $12 dollars an hour in 2008 (70% increase). Looking to an increase of $15 by 2011 (20% increase) is in keeping with Labour’s priorities.
If the National/ACT/Maori party government throw the bill out, well that just demonstrates the government’s priorities.
As the Penguin (god knows why he’s called that) at Kiwiblog points out, there are a few questions about the proposed amount.
The Government is even meaner than you thought they would be Trevor. The raise is 0.25c to $12,75.
The announcement is at http://www.beehive.govt.nz/release/minimum+wage+increased+1275+2
Excellent – a 25 cent rise – I was hopeful it would be a low as possible. Of course the minimum wage only needs to be a starting point. The lower the better. Then as the economic contribution of the worker increases and his/ her skills and productivity increase they can seek an increase from an employer who is prepared to pay for the skills contributed.
Congratulations National for making the good decision. Hopefully this will help more youth into work.
Hi Spud. @Monty, as I said earlier, the area in which we lag behind the rest of the OECD is in the amount our low-paid workers are paid. If the Brash report had been serious about catching up with Aus, this is where they would have concentrated their attention – there is actually not much of a gap at all on the higher-paid end of the spectrum. Furthermore one hopes this 25c is not an indication of how the low paid will be “compensated” when the new tax regime comes into effect. Good on you Trevor, for sticking to your guns.
@Monty no, other way around. Productivity is increased with pay rises.
Well done workers. An extra 25 cents an hour will make all the difference. Now you can afford that slice of bread you’ve always dreamed about.
Of course tomorrow we can expect the NZ Herald headline to read:
“Low Paid Have Reason To Thanks PM”
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10622103
the Penguin (god knows why he’s called that) at Kiwiblog
With all due respect to DPF… have some be nice comment deleted Trevor
The raise is 0.25c to $12.75
That’s roughly 2%. Consistent with a weaker inflation profile since the GFC (TM).
If you want to argue the minimum wage should go up faster than inflation when no-one else is getting much of a pay rise, that’s your call.
Hey Monty, do you want a sweatshop economy?
Monty, we’ve had this argument before, increasing the minimum wage DOES NOT increase unemployment. the 70% increase brought about by Labour (take note Jami-Lee) did not increase unemployment. Businesses don’t hire people because they have spare cash, they hire them because work needs to be done. If they can’t afford to hire those people then they will be forced to innovate and become more productive. Isn’t that what you want?????
Monty et al there is a myth that is promoted by ACT and used to promoted by the Treasury until they were challenged to produce the evidence that higher wages at the lower end causes unemployment.
Obviously if there was a big hop to say $25 this would be true but the international research is now focussing more on the job creation that flows from the multi round changes that happen when lower income people earn and spend. Depends on the type of jobs and the competition. Some jobs can be exported (and frankly who wants to compete with India at $2/hour) and others can’t.
Internationally people are recognising that increased wages puts a real incentive onto the employer to train and retain staff, and to increase their capital intensity both of which move us towards the high skill high wage economy.
And for a bit of evidence look at the job growth in the time of the last Labour government during which time the minimum wage rose from $7 to $12 and more for those in their late teens.
So let me get this right…
Labour increased the minumum wage from $7 to $12 – an average of 8% per annum – when the economy was booming.
Now Labour is saying the minimum wage should move from $12.5 to $15 – a 20% jump – at a time when the economy is only just recovering.
Seems to me Labour is just playing opposition politics – promise the world because you’ll never have to deliver.
BTW, you still haven’t answered this Trev – if you believe so strongly in a $15 minumum wage, why didn’t you do it when you were Labour Minister, just over a year ago?
Jami-Lee using your figures then all the Nats had to do was keep our rate of change going and they would very nealry have got there.
And on why we didn’t do it at the end of our term – the 2009 change was based on a process that could not of allowed us to do it using election year conventions in 2008. not that we would have done one hop then anyway.
The time for that signal is now -as we climb out of the recession lets make it clear we want our wages like Aussie not India.
Very disappointed at the low rise. I very much hope Labour’s bill is successful it would be a great improvement. Well done for writing it.
Also Jami-Lee the bill is to do it over 2 years (if it gets pulled from the ballot soon) so roughly equal to their previous rises in terms of %.
deleted at Spuds request. Trevor
deleted off thread Clare
Yes Trev i have to agree with you ,I do think the Minumum Wage should be increased but on the other hand i see a good point in making it Gradual.
National raised the Minumum Wage from $12.00 p/h to $12.50 p/h last year when we were still in recession.
Why cant they put it at $13.00 or $13.50 now that we are coming out of the recession if they were prepared to raise it by the amount they did when were stil in a recession?
matt read this, http://www.stuff.co.nz/national/politics/3266518/Mallard-puts-up-minimum-wage-bill
@ n0exit Yeah thanks mate i saw that its a good Bill in theory but i think pushing it up as far as $13.75 may just be a bit too ambitious at this time.
i would think that $13.00 or $13.50 p/h would be a good start as it would be carrying on the same trend National started by raising by 50c last year.
As long as we are gradually coming out of the recession an increase of 50C to $1 i dont think would be too harsh on Bussinesses and would proberbly be a good start for Workers.
I swear some of these commenters missed out on a history lesson (or a few hundred) at school. Do you remember what happened to wages during the Depression? They were cut. Although this isn’t quite a Forbes-esque 10% cut it is still a cut nevertheless (That is, it’s lower than inflation). Retrenching didn’t work to end the depression, in fact it prolonged it for as much as 2-3 years.
How many blocks of cheese will $2.50 buy? Oh wait, don’t worry, tax cuts north of $50/week!!1!1111
Was anyone on here shocked at just how many kiwis were on minimum wage, I know baristas that start on $18/hr and I didnt know that was ‘skilled’ employment?
A few short years ago I was given the opportunity to work at a pizza shop, I was told that I only got the job because I was under 16 and not paid the min wage.
I was motivated, worked hard, and before I even turned 16 I was duty manager, paid almost trip the money and in charge of 8 staff.
Why would an employer take a risk of employing someone like me if they had to pay $15 per hour to employee them? The youngest, least experienced and least qualified people in NZ will suffer.. Labour policy is not about reducing jobs…
You may say that this is only $2.50 per hour increase, but that is a 20% increase in wages for a business that employs a lot of young people – Maccers, BK, bars, pizza – This will cost opportunities for the worst placed people…
@Olwyn – Hi
!!
Trevor – the paper reports this morning “Raising the minimum wage to $15 an hour was considered by the Government but ruled out because it would cost up to 8100 Kiwi jobs,”
now I do not think for one minute the government did really consider raising the minimum wage to $15, but you policy could conceivably costs 8100 people their jobs – or is no job better than a low paid job?
The reality is that more often the minimum wage is for jobs which are often a stepping stone once the person has credibility, experience, skills and can make an economic contribution.
Deleted off topic. Go to the moderation post and comment on that topic Clare
Monty – Wilkinson used gross figure not net. Of course here will be some unvialbe jobs – but others are created.
@ Jeremy – the joys of anecdotal data. How about letting some facts get in the way? There are 12 barista jobs in Akld and Wgtn listed on the Winz site today.
These include two demanding plenty of experience yet offering only minimum wage. Highest rate on offer on any of the listings is $14.00 an hour.