Labour is the party of the workers, and they’re promising to raise the minimum wage to $15 / hour. That’s a cost to business, and National is the party of the rich, so they oppose it. But because the current minimum wage is so obviously falling behind real world living expenses, the Nats need a plausible reason to oppose the increase. Their line is that raising the minimum wage will cost jobs.
It’s bollocks. Under the last Labour Government the adult minimum wage went from $7 an hour to $12 – an increase of 71%. Unemployment was at historic lows. The youth rate went from $4.20 to $12 – an increase of 186% (before being largely abolished in 2008). Yet when Labour left office the youth unemployment rate of 17.9% was still below the level when they were elected in 1999. (Guest poster Bright Red did some excellent graphs that show the picture over Labour’s last term in more detail.) Looking back even further in 1975 the Third Labour Government nearly doubled the minimum wage to $12.46 in today’s dollars – unemployment didn’t skyrocket, the sky didn’t fall.
Given this history it is disappointing that Key and the Nats still get away with their scare mongering over minimum wage increases. Well, they’re going to find it a lot harder to do so now. Treasury’s advice to the government has just been made public:
Raising minimum wage won’t cost jobs – Treasury
Currently minimum wage is $13 an hour. National would like to lower it – for some workers to as little as $10.90. It says putting the minimum wage up, as other parties would, would mean employers would simply shed jobs. But 3 News has obtained Treasury documents that dispute that. …
The Department of Labour says [Labour's rise to $15] will cost 6000 jobs. But Treasury has a counter view; “This has not been true in the past. The balance of probabilities is that a higher minimum wage does not cost jobs.”
Not all employers are worried about a hike either. Andy Martin runs a pub, employing 26 people in Oamaru. He says put the wage up and people just spend more money – everyone wins. “$15 is fair,” he says.
There is an estimated 100,000 people on minimum wage and 300,000 close to it – so there are a lot of votes to takeaway. But only a Labour government would push it to $15 an hour next year – National would take years to get it there.
How long have Key and English had this treasury advice while they’ve been claiming a fair minimum wage would cause the sky to fall? How long have they been lying to us?
The choice for minimum wage workers on November 26th is pretty clear. National want to lower the minimum wage. Labour want to raise it. Labour has history, and Treasury, and basic common decency on their side…