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Labour calls for $13 minimum wage

Written By: - Date published: 1:51 pm, February 9th, 2009 - 34 comments
Categories: labour, national/act government, workers' rights - Tags: , ,

Phil Goff has come out strongly in anticipation of today’s minimum wage announcement from the Government with a call for an immediate increase to $13 an hour, rising to $15 over three years.

As he points out, if National only increases the minimum wage from $12 to $12.50 an hour as the DoL suggests, that represents an increase of just 9 cents an hour – or $3.60 a week – after inflation is taken into account.

“$3.60 a week doesn’t even buy a small block of cheese that John Key used to be so fond of talking about.

‘In difficult times, the burden too often falls on those already finding it hardest to survive,’ Phil Goff said.

‘Our lowest paid people in shops, offices and factories struggle to make ends meet. Every hard working New Zealander is entitled to a wage they can live on.

What’s more, the $3.60 will be eaten away further when National’s April 1 tax increases on low-middle income families are taken into account.

‘The lower paid, particularly families, were also the ones to lose rather than benefit from the tax changes legislated by National before Christmas,’ Phil Goff said.

‘As the Minister of Finance admitted, nearly three quarters of a billion dollars was stripped from the pockets of low and middle income families compared to the tax changes Labour legislated for.

“By contrast those in the top income brackets benefited by hundreds of dollars a week.

“It’s time for some fairness,” Phil Goff said.

Indeed.

34 comments on “Labour calls for $13 minimum wage”

  1. gingercrush 1

    Nice. Can we have $15.00 an hour, a huge cut to business tax and more personal tax cuts because that is what I would dearly love to see.

    I really have no respect for Goff, because had he been in government he wouldn’t have raised the minimum wage by a dollar. Unless of course the Greens wanted that much influence. Had the Greens come out today and said this, I’d respect it. Because they’ve actually been calling for this stuff. But Labour have said they’ll keep the minimum wage in line with inflation and what the average wage is. There certainly wasn’t no mention of an increase to 15 dollars over three years during the campaign. So pardon me if I don’t get behind Goff and say how wonderful his statement today is.

  2. Tane 2

    gc, Labour was pushing for a $15 minimum wage. Their policy was for it to rise with the average wage (which was projected to make it around $14.80 by 2011) but the plan was to have that formalised at $15 during coalition negotiations with the Greens (and NZ First if they got in), following the precedent of 2005.

    Of course, I would have liked to see them make their policy more explicit in their election manifesto and campaign on it, but they always were afraid of scaring the horses while in government.

  3. gingercrush 3

    Surely in a financial crisis indeed a recession, wages don’t go up as much as they do when times are good. So those projections surely would be out of date. I actually have no problem with the actual proposal. Personally, I want to see aggressive minimum wage increases. Though in my case in turn I want to see substantial business tax cuts and eventually personal tax cuts.

    My real problem, is I have a hard time seeing Labour actually doing this had they been in power.

  4. Pat 4

    An earlier post said any increase by National would be “a cynical public relations exercise”.

    Certainly this describes Goff’s statement today. The timing is nothing more than pure politics to take the gloss off the anticipated increase from National.

  5. Tane 5

    Pat, it’s not a cynical public relations exercise (although obviously any media release is a public relations exercise of some sort) because Labour has a track record of lifting the minimum wage aggressively and consistently over its nine years in office. National’s record is stagnation and decline of wages, the minimum wage especially.

  6. IrishBill 6

    No Pat, I suggested it might be. This might also be. Or it might not. I’m not too fussed as long as the minimum wage keeps going up. And it is. How do you like them apples, Pat?

  7. BLiP 7

    Another Green Party policy subsumed into the Labour Party’s sideline barracking.

  8. Daveski 8

    If National provides for only the minimal increase recommended by the Department of Labour from $12 to $12.50 an hour, after inflation that equates to only a 9 cents an hour rise in real wages.

    So Labour’s claims or was that SP’s that National would cut wages was:
    a. irresponsible
    b. a deliberate lie
    c. a mistake
    d. Winston’s fault

    I can’t see how you can go from claiming in one week that those Nasty Nats are going to cut your wages to it’s only a 9c increase in real terms.

    Goff is looking lost at present.

  9. Julie 9

    If the announcement is coming today, what time would it be likely? Cos today is starting to run out…

  10. Tane 10

    Daveski, the split in the cabinet that has caused the delay in the minimum wage announcement shows us that part of National wants to freeze it and part wants to do whatever it takes to remain popular. And they know very well that freezing the minimum wage would not only be unpopular, but would give Labour political momentum.

    When you look at National’s usual ideological bedfellows, Business NZ and the Treasury, they want to keep the min wage frozen. But then, they’re free to say what they want. National aren’t. And John Key and his advisers understand better than most that in politics it’s all about the long game.

  11. Tane 11

    Julie, you’re right, I’m starting to wonder myself. I imagine the stories in today’s papers were leaked from the Nats in anticipation of an announcement, which makes you wonder what the hold up could be.

  12. Peter Johns - bigoted troll in jerkoff mode 12

    Tane – split in cabinet, nah, that is shit, it is called divided opinion, this is healthy in a democracy. Not like when HC was in charge, Helen was always right when we had arguements was a comment that Mark Burton once said.

    How is business meant to pay for this in a recession? Lay off staff to pay the rest.

    Goff is a total fool – no idea of how business is run, 8% wage inflation in the current climate is not good for business survival, let alone growth.

  13. Daveski 13

    Funnily enough Tane, I was about to post the same. I have no doubt that there is a split in cabinet and your analysis is spot on.

    In particular, I think your last comment is most apt. Key does appear to be playing the long game and shows some of HC’s skills as an operator albeit in completely different ways.

    Interesting to say the least.

  14. Julie 15

    It was on Scoop at 4.12pm and it’s $12.50.

  15. Julie 16

    Snap Mr Brown! :-)

  16. gingercrush 17

    Its so blah really isn’t it. Fair but not stellar. And had they released this message last week they wouldn’t have had Labour out-PR them.

  17. Tigger 18

    Is Key playing the long game or is he just trying to keep everyone happy?

    Not the same thing…

  18. Tane 19

    Tigger, I’d say he’s trying to do both. It’s not sustainable, but it seems to describe his MO.

  19. Daveski 20

    I win the office sweep. I’ll accept an admittance from SP that he was wrong :)

    Not interested in rationales for this strategy but SP and some others here got it wrong and now have to put up with my gloating.

  20. Pat 21

    The silence is deafening. Congrats Daveski.

  21. they were going to go for no change, we put the heat of media questioning on them, they delayed the decision, then buckled for pr reasons – good result, not a great result, that would have been 13. but pressure from the left forced an at least neutral outcome for workers rather than the backstep the nats and their supporters wanted

  22. Scribe 23

    they were going to go for no change, we put the heat of media questioning on them, they delayed the decision, then buckled for pr reasons

    And you wonder why people have come to consider the “left” to be arrogant….

  23. Mr Magoo 24

    This is just ridiculous. 50c or $1 is not going to solve the elephant in the room: losing jobs.

    The reality is raising min wage on cash strapped companies increases wages budget (including those with pay rates tied to min. wage via contract) will cause harsher redundancies to occur in many cmopanies. A $1 increase is an 8.3% raise and that means a workforce of 12 needs to lose a member to remain static – which is a position ( or worse) many companies are in.

    What is needed is ways to create jobs for the swag of mostly min wage (or close to it) that are about to lose their job.

    And for those that are saying this is not the case the company I am currently contracting to went through exactly this sort of equation, just not not in response to the min. wage increasing. These scenarios are playing out all over the place in various forms and this will continue.

    Yes, 20 or so dollars a week will make “a difference” to a min wage worker, but losing their job will make a much bigger difference. I am annoyed that the column lengths are taken up with this as if this was the big decision to be made as opposed to National’s complete lack of ideas on more pressing concerns.

    And no I am not National bashing. I truly wish they would start to release ideas that will actually help get our most vunerable through this. This is not one of those ideas. Neither is Labour’s response.

    And for the record I think raising it to $15/hr at the moment would be economic suicide.

  24. lukas 25

    SP- “they were going to go for no change” proof? Or is it just “the word on the street”?

  25. mike 26

    “we put the heat of media questioning on them”

    Ha! This distorted self importance is priceless SP. As if the Govt give a flying feck what you lot think.

  26. IrishBill 27

    Mike, I think you’ll find the government (or more specifically National’s research/media team) read the standard very closely. They’ve even been known to crib from us.

  27. mike 28

    There are probably loads of nats read this blog for some light entertainment like myself IB – but to claim they change policy as a result is pure lunacy.

  28. IrishBill 29

    You’d think so.

  29. Santi 30

    Goff can call for the sky or any other thing he wants to. Nobody is listening to the poor guy, so he should shut up and prepare to be opposition for a long, long time.

    By the way, Labour needs a new leader. Phil does not cut the mustard.

  30. Pushing up wages just means pushing up prices for goods and services. Obviously many business have to put up their prices to pay higher wages. The low paid worker soon has to face increased prices so what’s the gain for him? Or if his employer can’t put up his prices he may be squeezed enough to lay off staff. Isn’t this all pretty obvious?

  31. Tane 32

    The low paid worker soon has to face increased prices so what’s the gain for him?

    Because even if we assume your premises are correct and the difference will come from higher prices rather than reduced profits, if you lift the minimum wage higher than inflation then by definition a minimum wage worker will be better off than he or she was before.

    Minimum wage workers are objectively better off financially after nine years of substantial minimum wage increases under the last government than they were in the 1990s when National let it fall behind inflation. Given we know this, how can you possibly argue that low paid workers would be better off without any minimum wage protections at all?

    The low paid worker soon has to face increased prices so what’s the gain for him?

    The rhetoric about the minimum wage leading to unemployment is baseless. Sure, if we raised it to $50 tomorrow there’d be layoffs. But we’re not talking about doing that, we’re talking about raising it by a small and affordable amount, gradually and over time, to an amount still well short of 2/3 of the average wage. The record of the last nine years shows as the minimum wage rose unemployment went down – to record levels, in fact.

    Clearly it’s not all as simple as Ayn Rand’s fantasy novels make out.

  32. sweeetdisorder 33

    “The rhetoric about the minimum wage leading to unemployment is baseless.”

    No it isn’t. Countless economic reports show the consequences of raising the min wage on the low skilled. But you believe what you want to believe and close your mind to the rest.

    “The record of the last nine years shows as the minimum wage rose unemployment went down – to record levels, in fact.”

    There is no evidence that one caused the other.

  33. IrishBill 34

    sd, over the last ten years the minimum wage has steadily risen and unemployment has been incredibly low. You are arguing causation. Tane isn’t. Your argument is that raising the minimum wage causes unemployment to rise. Tane has provided you with empirical evidence that the causation you argue is false.

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