25c slap in the face

Written By: - Date published: 6:38 am, February 8th, 2011 - 77 comments
Categories: john key, wages - Tags:

So John Key thinks that a 1.9% increase in pay will cover 4% inflation, and that’s all minimum wage workers are going to get.

That 25c/hour won’t add up to a litre of milk at the end of the day, let along a block of cheese at the end of the week.

A person on minimum wage will now get $437.24/week after tax, whilst JK gave himself over $1000 extra per week in tax cut.  It’s enough to make you sick.

John Key promised that life would be better for all Kiwis under National, and his bonus for failing to deliver is more than twice what those who slave for the minimum wage get in totality.

John Key promised that we’d catch Australia too.  Their minimum wage is $NZ19.75 – more than 50% greater than our minimum wage.  That’s their minimum minimum wage at that – most industries have higher minimum wages with their modern awards system.  You can see why more and more people are moving over there.

John Key also promised not to raise GST – and it’s the poor who are hardest hit there too, suffering another 17% of their wages.

National promised to make “Education a National Priority”.  But if your ECE costs are going up $25-$80/week per child are you going to be keeping your children there when you’ve rent rises to pay and food prices at record highs?

And with 158,000 families with their breadwinner on the dole, desperate for work, it’s not like you’ll be able to negotiate an above minimum pay rise.

Those at or near the minimum wage know exactly what National thinks of them, and there ain’t no words like ‘valued’ or ‘respected’ in the description…

77 comments on “25c slap in the face”

  1. tc 1

    I’m surprised sideshow even did that much….must be feeling charitable after his 6weeks off. He’ll tick that box marked ‘do something for the little people’ and back to business as usual by referring to their backers shopping list.

  2. millsy 2

    You probably should really be greatful there is an increase at all….

  3. Craig Glen Eden 3

    Thank God for the Cullen fund and Acc fund without these NZ would be a total cot case.
    Over two years of National and their policies are really starting to impact on the economy, while John Key bounces from cloud to cloud ( according To Blinglish) the little people struggle to put food on the table. Tax cuts for the rich have resulted in no stimulation for the economy,more and more small business struggle to survive and the economy slides further into recession.
    Our economy needs a minimum wage that allows someone to make ends meet or what’s the point of working.

  4. Colonial Viper 4

    Ahem…I know its inconvenient to point out, but this increase in the minimum wage is comparable to what that minimum wage worker would get from LAB’s $5000 tax free threshold.

    The benefits from having one in the pocket can’t really be said to be great while the benefits from the other, said to be a travesty, at the same time, can it?

    LAB has said that it will increase the minimum wage to $15/hr by the end of its first term. It needs to state its long term intentions around the income tax free threshold as well. I think it needs to go to $10K p.a. by the start of a second term in office.

    • AndyB 4.1

      i never thought i would see that from you. well done! we cant all bag the nats for an extra $10 a week, when you guys all figured that $10 a week tax cut was a great idea (albeit a bit on the light side)

      Lab said they would increase it to $15 by 2014, that is still a fair wait, not exactly the “raise it to $15 an hour now” school of thought.

      The min wage has gone up $1 per hour since National came to office. $40 a week average, that’s not bad really is it?

      • kriswgtn 4.1.1

        The min wage has gone up $1 per hour since National came to office. $40 a week average, that’s not bad really is it?

        NO it hasnt
        where yours stats

        20cents last year

        25cents this year

        Cant you count

      • Olwyn 4.1.2

        I think you will find on closer inspection that it is 50c, in two 25c lots. I am fairly confident that it was $12.50 when Labour left office.

      • orange whip? 4.1.3

        Not bad as long as the cost of food, rent, petrol, car registration, electricity, and GST on everything haven’t dramatically increased I suppose.

        But they have, so yes it is bad.

      • bbfloyd 4.1.4

        i’m sure you are just trying to be humerous. otherwise you’ve earned a fuck off wanker from everyone who earnes that wage.

    • Locus 4.2

      In Germany, Scandinavia and Austria they don’t have a statutory minimum wage because they have strong trade unions. Typically an unskilled worker earns the equivalent of NZ$60 per hour. Top margin tax rates on average income workers are: Austria 50%, Germany 45% , Denmark 51.5%, Sweden 55%, Norway 54.3%. So it’s possible to tax people highly if you pay them enough. And gosh, if you have fair minimum wages… the ‘trickle down’ effect really does work.

      • Colonial Viper 4.2.1

        That’s exactly correct. Its not about lower taxes, its about higher incomes. NAT know how to do the former (for the rich) they won’t do the latter (for the many).

      • AndyB 4.2.2

        “Typically an unskilled worker earns the equivalent of NZ$60 per hour”

        Could i see a source for this please. That’s 34 € an hour @ 40 hours a week, is 70,000 euros a year for an unskilled job!

        According to Wikipedia, the accepted unofficial annual minimum wage in Austria is €12,000 to €14,000.

        I cant seem to find an example of an unskilled person in either of the countries you have listed earning anywhere near that much. I have just got back from spending 5 years in Europe and the UK. I’m pretty sure you are way out in your statement.

  5. Bill 5

    A tax free threshold would have no impact on minimum wage levels whatsoever, since the minimum wage is a pre-tax figure. Therefore any rise in the minimum wage by Labour would be in addition to the $10 per week from Labour’s tax policy.

    Which means that comparing the pre-tax $10 per week minimum wage increase to Labour’s $10 tax cut is meaningless and not altogether honest. To be clear. if Labour was instituting a 25c increase today, minimum wage workers would be receiving $10 (before tax…min wage increase) plus $10 in the hand from the tax change.

    Or about double what National are offering. (Assuming that a Labour government wouldn’t have welched on raising the min wage in lieu of them having introduced the tax change…which well, you decide how cynical to be.)

    • Bunji 5.1

      Right on Bill. The $5000 threshold would be $10 in hand, 25c minimum wage is $8.25 for a start, and it’s not an either/or. Labour are committed to raising the minimum wage to $15 by the end of the next term, which would have mean ~65c rise in minimum wage each year ($21.45/week after tax).

      So $8.25/week or $31.45/week – Labour are offering about 4x more than the Nats for low-income people.

      • Colonial Viper 5.1.1

        So, now I’m interested in the figure that LAB thinks the minimum wage should have gone to this round.

      • Pat 5.1.2

        Hows them apples and oranges you’re comparing?

        It is not $8.25 vs $31.45. The former is what National have provided this year, and the latter is what you expect Labour to provide over the next 3 years. Your comparisons assume National will provide no further increases to minimum wage over the next 3 years.

        Like the Viper said, it pays to not obfuscate with basic figures.

        • Lanthanide 5.1.2.1

          They were touch-and-go on whether to raise it by 25c at all last year, with the recession as the excuse.

          So I wouldn’t count on them raising it every year, or raising it by more than 25c at a time.

        • Bunji 5.1.2.2

          No, over 3 years Labour would give $84.25 after tax.

          Altho I’ve realised I’ve left ACC levy out, so:
          $8.05/wk from National this year
          $30.92/wk is what Labour would be offering this year
          or $82.49/wk over 3 years.

          • Pat 5.1.2.2.1

            You forgot the fruit and veges.

            Pray tell, why is Phil Goff not shouting from the rooftops that a vegetarian on the minimum wage would be $100 per week better off under Labour? Oh that’s right – cause it’s bollocks.

            • Bunji 5.1.2.2.1.1

              If you like we can add say a typical family’s $6 for no GST on fruit & vege. Make it $37/week versus $8/week.

              But you just keep believing it’s bollocks because you think so.

  6. vidiot 6

    “That 25c/hour won’t add up to a litre of milk at the end of the day, let along a block of cheese at the end of the week.”

    $2.80 for 2L of Milk – $1.40 per L (8 hours @ .25 after tax = $1.60 in hand)
    $7.99 for Anchor cheese block edam 700g (40 hours @ 0.25 after tax = $8.00 in hand)

    Well bugger me…. it does add up to both of those items.

    /me thinks back to those ‘chewing gum tax cuts’ that were promised and never delivered.

    • Lanthanide 6.1

      They were proposed, not promised.

      They weren’t delivered because National (and the media) started screaming about how misery Labour was being. So Cullen figured “screw it, save it for later”, and did. You got the tax cut in October 2008 from Labour.

      • vidiot 6.1.1

        “In addition, we will index personal income tax thresholds to adjust for inflation from 1 April 2008,”

        http://www.treasury.govt.nz/budget/2005/pdfs/exec-sum05.pdf

        we will, not we might…

        Next you will be saying that Goff’s promised spend up of $5bn is just proposed and not promised – will they say just about anything to try & secure a vote.

        • Lanthanide 6.1.1.1

          Was that provision voted on, and later repealed through another vote, or did it never get voted on in the first place?

          That’s the difference.

          National rushed under urgency in early 2009 tax cuts for 2009, 2010 and 2011. They then rushed under urgency to repeal the tax cuts in 2010 and 2011 – they cancelled them.

        • Bunji 6.1.1.2

          The fact that National cancelled them when they introduced their first round of tax cuts for the rich in 2009 doesn’t mean they weren’t delivered by Labour.

          • Lanthanide 6.1.1.2.1

            Actually vidiot is talking about the tax cuts proposed in 2005, which has nothing to do with the tax cuts that Labour passed in 2008 and National repealed in 2009.

      • infused 6.1.2

        Yes they were – and canceled.

    • Bunji 6.2

      You get a very good price for milk – can I ask where you shop? Your cheese isn’t a bad price either.

      And the “block of cheese” was the one John Key referred to – a 1kg block, that currently costs an average of $14 (up from $12 in the last year, although JK had it costing $16 back in 2008, I certainly don’t want to shop where he does!)

      The press has milk at $2.40/litre, though I think the more normal consensus is $2.20.

      Milk and dairy sales are currently dropping in NZ due to price hikes – we pay much more than they do in Sydney or London – which doesn’t seem right…

      • vidiot 6.2.1

        Milk is just the regular Dairy Dale brand, sold around Auckland at various dairies. Dairy Dale is made by Fonterra.

        $9.99 for 1Kg of Cheese @ Countdown.

        http://www.oilyrag.co.nz/The%20milk%20report.pdf

        • Lanthanide 6.2.1.1

          My countdown had 2L milk for $3.49, and 1L bottle for $2.05. That’s the home brand or whatever is cheapest (since it’s all the same).

        • Bunji 6.2.1.2

          From your oily rag link, in May 2009

          The lowest price for a standard 2-litre bottle was $2.40 for Dairy
          Dale brand at a speciality food outlet in Manukau.

          That was the cheapest it could be found at more than 600 outlets before 2 or 3 serious price rises on dairy in the last 20 months.

          You obviously don’t take note of what you pay for milk now, at your local.

          I try and buy my 1kg of cheese when it’s on super-special at $9.99, but that’s not the average price people have to pay…

          • Lanthanide 6.2.1.2.1

            It’s about all I ever pay for cheese. Of course I buy the cheapest or almost-cheapest if it’s a better brand, rather than slavishly buying the same brand all the time.

            Then again I don’t have a family and so usually buy 1kg cheese once every 3 or 4 weeks usually.

            • Blondie 6.2.1.2.1.1

              Well whereabouts do you shop then, cos that’s an awful lot less than I can find cheese at any supermarket out my way.

              Seriously. I’d love to know, as I’m sure would many other Standard readers.

              And I only ever buy cheese if it’s on special. Full stop. It’s just too expensive to treat it as a dietary staple anymore. Ice cream is a much cheaper way of getting dairy into ya.

              • Lanthanide

                Countdown. I’m not sure of the price of the homebrand blocks, they might be $12 for normal price, but are often on special. Countdown has about 5 or 6 different brands of cheese (seems to change over time), some are better than others. Signature range is one of the better ones, Alpine Farm is probably one of the worse ones. Homebrand is about in the middle, and Mainland or Anchor would be the best.

                I just buy cheese when it’s on sale, and if I see a good sale before I’ve entirely used my last lot up, I just buy a new one and keep it.

              • Draco T Bastard

                And I only ever buy cheese if it’s on special. Full stop. It’s just too expensive to treat it as a dietary staple anymore.

                Yep, cheese comes into this house about once every quarter or so now.

                Ice cream is a much cheaper way of getting dairy into ya.

                Dairy is pretty much bad for you any way so I don’t go out of my way for it.

          • vidiot 6.2.1.2.2

            I paid $2.80 for 2L this am, so $1.40 a L

            • Lanthanide 6.2.1.2.2.1

              Try buying a 1L bottle and see how much that is.

              • Colonial Viper

                $1.90 if memory serves correctly.

                Usual story, if you are rich enough to buy in bulk you always save. From twinpacks of Shrewsbury biscuits to bulk meat trays.

                • vidiot

                  $1.89 for 1L UHT vs $2.80 for 2L of Dairy Dale – bit of a no brainer.

                  And buying in bulk/volume does not always save either – next time you are shopping compare the cost per 100g of items, larger packets != better value in some cases. It is cheaper some times to by 2 x 1Kg of Clothes wash powder than 1 x 2Kg – especially when on special.

                  • Lanthanide

                    With cleaning products it’s quite frequent that smaller packets can be better value, especially when on special as you say.

                    With food this is much less often, although obviously buying cheaper brands can make a big difference – often homebrand/signature range can be a bigger pack for a cheaper price than the name-brand one.

  7. tsmithfield 7

    So, if the government regulates the minimum amount people are allowed to charge for their labour, why shouldn’t it regulate other costs such as the minimum amount supermarkets are allowed to charge for milk and bread, or the minimum amount that electricians are allowed to charge out at?

    • Colonial Viper 7.1

      In response, yes, I’d say that Government should definitely regulate the cost and availability of necessary utilities.

      Electricity, water, basic banking, basic internet, public transport.

      LAB has also declared it will treat the pricing of fresh fruits and vegetables differently, which although not regulation per se it is definitely specific treatment of a particular group of products.

      Common goods and services which are not necessities of civilised living – well, the market is still a pretty good mechanism for sorting 99% of that out.

      Any other questions tsmith?

    • Draco T Bastard 7.2

      The government should be regulating whatever needs to be regulated so that society is viable because the free-market is irrational and following an irrational, and incorrect theory, is insane.

      • tsmithfield 7.2.1

        Except neither of you read what I said. I said “minimum” not “maximum”.

        If the government is concerned that everyone has enough to get by on, shouldn’t they be regulating the minimum amount individuals and businesses are allowed to charge for the things they supply, just as with the labour rate?

        • Colonial Viper 7.2.1.1

          Sorry about that, didn’t quite catch your min/max point in your first post.

          I’d suggest that if individuals and businesses can figure out what their costs are and what employees need to live on, its not too tough to calculate the margins that they need to operate to, and hence what they need to charge.

          The minimum wage is set because employers have no problems paying someone $7/hr or $8/hr if they can get away with it, even though there is no way someone can live and participate in society on wages like that, so communities end up with a whole class of working paupers.

        • Draco T Bastard 7.2.1.2

          I said that the government should regulate whatever needs to be regulated. This could be minimum or maximum. Personally, I like the use of a <a href="http://thestandard.org.nz/universal-income-the-minimum-wage/Universal Income and enforcement of a Renewable Resource Base. The first dictates a minimum living standard while the second ensures that society is actually sustainable. The Renewable Resource Base would also, to some degree, enforce minimum pricing while the Universal Income would ensure that our resources are used to support us.

          And yes, I actually do think some things are too cheap resulting in over use of resources. A problem with productivity gains in extraction. As supply is increased prices are driven down resulting in more demand with less profits. To boost profits more extraction is required. Now, according to the really stupid economists, this should balance out at some point – It never will. Increasing population, increased market size, new technologies, wear and tear etc results in a permanently increasing extraction rate which must result in the resource being completely consumed. The “free-market” really is a cancer and it’s killing us and the rest of the planet.

          • Colonial Viper 7.2.1.2.1

            And yes, I actually do think some things are too cheap resulting in over use of resources.

            store bought booze for instance.

  8. tsmithfield 8

    Except in many industries there are cowboys who cut corners to undercut legitimate businesses. From a socialist perspective this puts the jobs of legit businesses at risk if they can’t compete. A minimum rate would sort this out, surely, especially if you believe minimum rates should be set for one thing, labour.

    Anyway, I don’t believe that minimum rates should be set for either labour rates or business charges.

    Why should someone be locked out of the workforce if they are happy to work for $7-$8 per hour, as there would probably be a lot more employers willing to employ at that rate.

    Surely, the social justice aspect would be served by increased top-ups from the government by through the various vehicles that exist for that purpose now (e.g. WFF etc). At least then we would have higher employment which is better for everyone.

    • Draco T Bastard 8.1

      If people are being rational and doing budgets before hand there won’t be anyone willing to work for $7 to $8 per hour as their return just wouldn’t costs.

      BTW, a minimum wage actually does enforce minimum pricing to some degree as that cost needs to be covered.

    • Colonial Viper 8.2

      Why should someone be locked out of the workforce if they are happy to work for $7-$8 per hour, as there would probably be a lot more employers willing to employ at that rate.

      Well lets do a societal cost benefit analysis.

      For starters, how much will unemployment drop by within 6 months of the minimum wage being reduced to $7/hr?

    • KJT 8.3

      Why should the rest of us subsidise an employer who cannot meet the full costs of employing his labour. Including bringing up the replacements for the future.

      Tax payers already subsidise businesses like takeaways and temporary labour forces with benefits to enable their workers to survive.

      Even from a strictly capitalist point of view that is inefficient use of resources. That business should fail and free up resources for more efficient ones.

  9. JRM 9

    IF there are so many people out there worried about the minimum wage being so low, why don’t you people gather your resources together, start a business (let’s say a small supermarket as we’re so concerned with putting food on the table at a reasonable price), pay every worker what you think they’re worth (at least $15), and then sell your fine produce at a price lower than any other food outlet.

    You could keep profit margins down by paying management barely more (or even less) than what workers get paid, and distribute no dividends to the shareholders (you guys), instead, redistributing this among the community directly (through charitable donations), or indirectly (making prices even lower, or expanding your company to more locations).

    People would flock to you, as (a) you sell good produce at a low price; (b) you pay your workers well; and (c) as management, you don’t take more than your ‘fair share’, even though you set up the entire enterprise.

    All these newly enriched workers can then band together and begin their own businesses (let’s say now a clothing store) selling fine produce at a low price and paying their workers high wages.

    Problem solved!

    • Lanthanide 9.1

      You’re arguing absurd economies of scale and you know it.

      How about the existing supermarket duopoly simply drop their prices and stop posting record profits year after year?

      • JRM 9.1.1

        Because they have no reason to.

        If people are mad at them for posting profits, they should do something about it. Shop somewhere else or grow your own. If there’s nowhere else to shop, there’s a niche to be filled. If you don’t have space to grow your own, improvise, or move (what’s more important, being able to provide food, or living somewhere which, although maybe close to the dairy or central city, has nowhere to grow food).

        Break the duopoly and compete. It’s not impossible to do, you just need enough people to do it.

        And those people are right here, but they would rather preach than do.

        • Colonial Viper 9.1.1.1

          Break the duopoly and compete. It’s not impossible to do, you just need enough people to do it.

          Its tough as you need a high level of co-ordination and capitalisation to effectively break the hold of a monopoly or duopoly. That is best done by a central agency (Government) or another well moneyed competitor looking to angle in.

          Which is not to say that people are not trying (see the rise of farmers markets etc).

          However your suggestion that individuals for example move houses (!!!) just so they can take on the big supermarket chains with a bit of ‘grow your own’ does show that your methodology is pretty impractical. As you say this is not impossible, but clearly IMO just impractical.

          And those people are right here, but they would rather preach than do.

          Try not to be such an asshole.

          • Lanthanide 9.1.1.1.1

            “That is best done by a central agency (Government) or another well moneyed competitor looking to angle in.”
            Yeah, even The Warehouse gave up, and they’re the biggest retail chain in the country.

            • Colonial Viper 9.1.1.1.1.1

              Yeah, you actually require a massive and flexible logistics system able to manage perishable goods to compete with the big supermarkets. JRM totally underestimates the complexity and cost of establishing something like that.

              My suggestion would be to go to the Four Squares and other independent mini market chains and support them in becoming bigger players.

    • Draco T Bastard 9.2

      They’re called co-operatives and they do work. Unfortunately, the business model used is a capitalist one that almost enforces the exploitation of the masses.

      • Colonial Viper 9.2.1

        Exploitation would only occur if the aim was to maximise return on capital.

        There are plenty of not for profit enterprises out there who pay individuals who work in them a good wage, but are otherwise not geared to make huge profits off customers/clients.

  10. TightyRighty 10

    Value is gained through acquiring skills or experience. Labour made acquiring experience and skills difficult for young workers by abolishing youth rates. Respect is earned.

    • Colonial Viper 10.1

      Respect is earned.

      True.

      But like the average Righty you think money = respect.

      Untrue.

      Labour made acquiring experience and skills difficult for young workers by abolishing youth rates.

      Nonsense. A fair days pay for a fair days work. Any person doing the same job with the same work output should be paid the same. Whether the person is 16 or 26.

      • TightyRighty 10.1.1

        You know what I think do you? Well I’m glad somebody does. Your arrogance is boundless.

        Your argument for no youth wage is fallacious. I would rather pay minimum wage to someone who is twenty six if the only other option is someone who is sixteen. I can be guaranteed to hire someone with more experience and skills, and if they are still on minimum wage at twenty six, will be that much keener. Therefore sixteen year old loses as they have lessto offer, with little chance of gaining it.

        Fuckwit

  11. frizaxojx 11

    Only people working a 40 hour week get the full raise. I am on a sickness benefit and work 13 hours a week. After paying secondary tax of 19.5 % and haveing WINZ rebate my benefit by 70 cents in the dollar, I am .34 cents a week better off. Can’t even buy a packet of instant noodles in my super market for that.

    • Blondie 11.1

      File an IR3 at the end of the year; you’ll probably get a tax refund. Not much help right now but at least you can get something nice for yourself then 🙂

  12. Flight 19 12

    $13 an hour or $430 + a week is good money if you’re young with no bankable skiills (ie a qualification) and little to no responsibilities or bills except maybe some board to mum and dad or some rent if you’re flatting. Good if you can get it that is. If you spend wisely that should be plenty to live on + enough to start saving some. I’m starting a new website this year and if I can make enough to pay myself $10 an hour I’ll be happy. Why? Because I know that, just like a smart young worker on the first rung of employment that works it out, if I put in the hard yards to start with the benefits will come later. In this case next year I may then be able to pay myself $15 an hour and so on.

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