I’m stoked that my Mondayising Members Bill has successfully proceeded to select committee. Members Bills provide the opportunity to pass legislation against the Government. A sensible idea and sufficient luck mean positive change becomes possible from the opposition benches.
It looks like the heavens are smiling on me. I have just now heard that I’ve had a second bill drawn. This time I aim to raise the minimum wage to $15/hour.
I’m convinced that the minimum wage needs to go up sooner rather than later. There is too much inequality in NZ. The poverty inequality drives is destroying lives and wasting the opportunity to get the best out of our people. I’ve previously explained how this has come to pass and why it is hurting us.
Critics argue that too high a minimum wage risks growing unemployment. At some point this is undoubtedly true. If the minimum wage went up to $30/hour, a bunch of businesses would go under. That wouldn’t be good. On the other hand, if the minimum wage is too low, the Government ends up dishing out subsidies to families to keep them out of poverty (or worse, it chooses not to give out subsidies to keep them out of poverty).
A direct link between minimum wage and employment has never been successfully drawn. Expect a Nobel Prize for any economist who manages it. What we do know is that a lot of the rhetoric does not match reality. National raised the minimum wage just 70 cents in their last 9 years in Government and unemployment soared. Labour raised it $5 in their last 9 years and towards the end of their time enjoyed the lowest unemployment in the Western World.
A $15/hour minimum wage seems to have consensus in New Zealand as a figure that will not cause unemployment, but comes closer to a living wage.
Interestingly, a lot of small and medium businesses routinely pay this wage because they know their workers, believe in them and understand how close to the poverty line they live. It tends to be a few rogue larger firms that screw their workers down to the lowest common denominator.
The costs of treating poverty related illnesses low-paid workers and their families bear are carried by all of us through the health system too. So we effectively as taxpayers end up subsidising rogue employers and their bad practices. This is bad for NZ socially and economically and it needs to stop.
I argue for increases in the minimum wage over time on the basis that it stops bad employers from exploiting low wages as a means of generating wealth. Instead they have to explore ways of working smarter and increasing productivity. Most employers get this.
But fresh thinking from those who subscribe to a mean understanding of human nature suggest that even they should support minimum wage increases. Of particular interest to me this week is a recent article written from a very conservative economic perspective that shows why even Act Party acolytes ought to get in behind this change.
I see your $15 hr minimum wage bill has been drawn in the ballot – along with the ‘gay marriage’ bill.
There must be tearing of hair in the beehive today
Good luck…Which table will the teacups grace? The Nats have long given up trying to put anything on the table for the less well off.
And as for ‘Catching Aust.’- they let that promise quietly spill post the 2008 election – well except for their wealthy chosen
How do the votes lie on this ? More to the point perhaps,where does Peter Dunne stand?
I doubt Dunne would support it, but even if he did and it got past the first reading National wouldn’t – and couldn’t – let it proceed to law.
What would be the additional cost to Government? I assume it would be significant, unless things like elderly care got substantial funding increases.
And, as everyone knows, there’s nothing spare in the kitty.
Gosh Wyndham, How could you ever put ‘Dunne’ and ‘lie’ in the same line
Well Wydham theres this :
“Most of the minor party political leaders say the minimum wage should be increased.
They commented on the issue during a TNVZ debate on Wednesday night.
The Maori, New Zealand First, Mana and the Green Party leaders all supported raising the minimum wage from $13 to $15.” Via Radio NZ in 2011.
Dunne was all for more ‘productive jobs’ along with ACTs Don Brash.
Since we havent got that either
It appears its not on his wish list – elimination of Gift Duty was more important for him.
You said … “Interestingly, a lot of small and medium businesses routinely pay this wage because they know their workers, believe in them and understand how close to the poverty line they live.”
This isn’t an argument for the wage to be raised. These businesses are providing higher wages as part of their overall compensation package, if the minimum wage goes up they are going to start demanding higher wages – they aren’t minimum wage workers and need to be compensated for the relative fall. Changing the minimum wage is still going to have significant costs on these businesses.
The problem we face here isn’t that a problem with greedy businesses it is the fact that there are significant parts of the New Zealand population who can’t produce something people are willing to pay $15 an hour for.
You can’t legislate prosperity – people still need the skills to produce something others value.
United Future does not support raising the minimum wage.
United Future leader Peter Dunne says the minimum wage is just that – a minimum rate. He says the aim should be to get people on a higher wage because they are in productive jobs.
http://www.radionz.co.nz/news/election-2011/91259/four-minor-parties-back-rise-in-minimum-wage
This is a politicking bill, it would presumably have been known it stood little chance of success.
Come 2014 the new coalition can up it as soon as they get in.
Sadly, an icebergs chance in hell of this one passing in it’s first reading. It will quitely be defeated and all the media will be over the ‘gay marriage bill’
@ Fortran
Are you already conceding that Labour can’t win on it’s own in 2014? I think a confidence and supply agrement on the left would be far more productive, than a forced marriage!
David, any hard data on who gets paid between $13.50 and $15 an hour?
@Tamati – actually, as a tory, he is quietly conceding that the right can’t win in 2014.
@Pete G – that’s right UF, minimum wage jobs aren’t productive jobs! I should know having worked a few. For example, planting grapevines, pruning them, tending to them throughout the flowering cycle and harvesting them to make $150 per bottle wine is definitely not productive!
Honestly, where do you guys get off? System as it is, not everyone can work at the top end of the pay scale.
A coalition government will be a one term government, just ask Nick Clegg.
A universal basic income would do more to reduce poverty than this sort of cosmetic tinkering, Dr Clarke. How about promising to make the first $10,000 of income tax free and pay for the loss of revenue by introducing capital gains tax?
How many more unemployment benefits will the 2014 government have to pay after you bring this in. If you(labour) hasn’t even costed it (as stated on Q&A), I don’t expect you will have thought to consider other unintended? consequences. Don’t forget about the number of small firms that may go under, which means the tax base will reduce, so you might have to put taxes up more than you are currently planning to. You might also need to look at reducing the tax brackets as well. It might mean I will become a rich prick on $40k. Yay, I always wanted to be rich.
If you need any more advice on developing policies, just let me know. I’m here to help. The other option would be to talk to some of the more experienced politicians in the labour caucus. Or are they too busy thinking up ways to “get John Key”, or maybe planning the next filibuster. You better keep an eye out, they might filibuster your bill by accident.
One Track cannot are supermarkets and the fast food outlets run by small companies? No. Are the rest homes who pay carers minimum wage small companies? Are the hospitals who pay some cleaning and kitchen staff minimum wage small companies?
The only ones are probably cleaning contractors – and they would pass on any costs at the next contract round to the property.
The only jobs that might be lost – would be in conversion of check out counter staff positions to self-service or shorter opening hours (so they say – but new supermarkets are opening across Wellington despite the increase in minimum wage, it was only $9 in 2005).
jennifer, about 500,000 people would receive a pay increase. Many businesses routinely offer above the minimum wage – pay a premium to have the pick of staff. And more provide some sort of bump above this as recognition for the skills required – it has an impact across the labour market.
IMO the low level of the minimum wage here because the National government of 1990-1999 held the level down, was one reason for the growing wage gap with Oz. The other, the smashing of the local union awards by the ECA.
An estimated 41,300 workers are on the minimum wage and another 200,000 earn less than $15 an hour.
http://www.neon.org.nz/trackingequalityatwork/lowpayandminimumwage/
But as I noted many of those already paid $15 and also those paid up to $20 an hour would also get a pay bump.
This link shows relativity of todays minimum wage with past levels and also how the return to labour from increases in productivity have been too limited.
http://union.org.nz/vote-fairness/wage-problems-cant-be-overlooked