Clark on the minimum wage

Written By: - Date published: 8:55 am, September 5th, 2012 - 18 comments
Categories: class war, labour, wages - Tags: ,

Labour’s speeches and press releases are going to be under intense scrutiny in the months ahead, as the pundits and the public look for signs of the party’s direction. David Clark’s opinion piece in The Herald makes for welcome reading in this respect:

David Clark: The PM’s cleaner deserves more pay

It is a truth few politicians want to acknowledge. From the moment they are elected, they are on borrowed time. In the past 19 years New Zealand has had four Prime Ministers.

Each has temporarily had the keys to the ninth floor of the Beehive on loan from the public of New Zealand. Politicians come and go, but over that same 19 years one woman has had uninterrupted access to the Prime Minister’s office. She is not a household name, but most nights Jaine Ikurere turns up to work at Parliament to clean up after the politicians. It’s not a job many people would want, and particularly not for $14.60 an hour. …

And they are not alone. Currently more than 200,000 people are paid the minimum wage. Many of them will receive top-ups from the state, in the form of Working For Families or the Accommodation Supplement. They need that taxpayer support because they can’t live on their weekly pay packet.

Lifting the minimum wage to $15 an hour, as proposed in my Bill awaiting debate in Parliament, will not change that overnight, but it is a step in the right direction.

… no direct link between lifting the minimum wage and job losses has ever been proved. What has been proved is the destructive effect of poverty and inequality. The incidence of poverty-related illness in New Zealand is a national disgrace, and costs taxpayers hundreds of millions of dollars a year. Giving low-income workers a boost in wages will help thousands of families pay their power bills and help them afford doctors’ visits and prescriptions.

This is an issue of fairness and basic human dignity. …

Simple, direct, well researched, and thoroughly grounded in Labour values. Clark is clearly aware of research on inequality (see The Spirit Level etc.) and takes everything back to first principles. He hammered the same messages during his election campaign in Dunedin North, these are issues that he was passionate about well before he took on the minimum wage Bill. More speeches like this one please Labour!

Disclosure: While not active recently I have in the past been a member / Chair of the Dunedin North LEC, and I served on Clark’s campaign committee.

18 comments on “Clark on the minimum wage ”

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  1. Dr Terry 1
    5 September 2012 at 9:39 am

    The best of luck to David Clark and Labour on this very important matter. He is sure to run into a wall of National’s resistance, as the Tories, in formulating policy, have no place for any thought of issues concerning fairness and basic human dignity.

  2. starlight 2
    5 September 2012 at 9:49 am

    Great stuff,from watching parliament tv i felt David Clark has potential,his star is rising
    and the labour party so desperatley needs more like him to pull labour back to its core
    values,maybe this isn’t the favoured language for some,but its what the guts of labour
    is,what it was founded on,those are human decency principles and even to this day
    those principles need to be recognised and not hi-jacked by the more right wing
    politicians who reside within labour.
    Peoples needs dont change,peoples expectations dont change, only those who become
    labour politicians change the path of labour which is evident today.
    While we watch with angst at the potential demise of the labour party we can now
    feel a shimmering hope that those who are on the left in labour can get a voice to
    give labourites some shimmer of hope.

  3. Bill 3
    5 September 2012 at 10:08 am

    The call for a $15 min hourly rate was begun when (from memory) the min. hourly rate was $12.75 (possibly lower). The current min rate is $13.50.

    So, raising the min.rate to $15 now, although welcome, isn’t the necessary boost it might have been a few years ago.

    And I believe it’s crucial to address the artificial downward pressure on wage rates – the employer subsidy of wff.

    Further, if min. wage rates are ever going to be tied to a %age of the average wage rate, then the %age of workers on min. wages needs to be addressed. Otherwise the idea that people are kept out of poverty by receiving a min wage that is set at a %age of the average wage simply falls over…the rate would be artificially low given the sheer number of people working for a rate of pay close to the min..

    And of course, that has a knock-on effect with regards any setting of benefit levels as a %age of min. earnings.

    And so it goes on.

    So okay, incremental increases to min. wage rates are to be welcomed. But in and of themselves they risk achieving little. The bigger picture needs to be looked at – the entire regime of remuneration including, but not limited to the bargaining environment – and bold policies formulated and implemented.

    • Matthew Whitehead 3.1
      5 September 2012 at 5:53 pm

      Do you have suggestions on how to raise the average wage if WFF is abolished?

      (That’s not me being snarky, I’m curious if you have ideas on the matter)

      I agree that it’s important to raise BOTH the minimum and average. In some respects raising the minimum wage will help the average, but not necessarily all the time, and you’re absolutely correct that WFF sidesteps some of the upward pressure on wages to be sufficient for raising a family.

      • Bill 3.1.1
        5 September 2012 at 6:13 pm

        If the publicly funded wff was abolished and the cost put back onto the private sector where it rightly belongs, then wages would be subject to tremendous upward pressure. And bending over backwards here – I’m aware that some small businesses would legitimately scream blue murder. So, perhaps there could be a phasing out period for smaller businesses. If they can be aided through a transitional period where general wage levels are rising, then they as well as workers would benefit with more expendable money in the economy….it’s basically the same argument that applies to raising benefit levels. A lot of the money would get spent back through smaller businesses that are currently starved of money in a tight economy where ‘no-one’ has much discretionary income.

        I’d actually advocate for all non-working entitlements to be funded from the private sector through increased taxation on business, rather than from the public sector…which could facilitate a drop in PAYE and again, more money flowing in the economy. As well as near to damned zero unemployment as business suddenly and miraculously found ways to employ people, it being a cheaper option than funding a 5 or 7 or 10 % unemployment rate.

        • Colonial Viper 3.1.1.1
          5 September 2012 at 6:21 pm

          Have to disagree somewhat. You can’t just increase taxes on SME’s; large parts of the sector are struggling as it is. What you want to do is increase the profitability of SMEs and then ensure that workers get a lions share of that.

          So IMO you have to levy taxes on areas of the economy which are almost completely untouched by taxes now, and areas of the economy where windfall profits are currently being made at the expense of the rest of us (including at the expense of SMEs). There are tens of billions of hoarded capital which needs to flow through communities again.

          • Bill 3.1.1.1.1
            5 September 2012 at 6:30 pm

            Sure. So set tax rates according to business size or whatever. And give smaller business breathing space. Within the paramters of a market economy, I don’t have a problem with that.

  4. vto 4
    5 September 2012 at 12:38 pm

    I still remain as astounded today as I was recently when it was pointed out that ……
    .
    .
    it is cheaper for an employer to pay the minimum wage than it is to keep a slave.

    end

    • fnjckg 4.1
      5 September 2012 at 12:46 pm

      Now thats interesting

    • Draco T Bastard 4.2
      5 September 2012 at 2:47 pm

      I worked that one out ages ago. A slave needs to be well kept – housed, fed, health seen to etc etc. A minimum wage worker can have his fortunes blamed on themselves while keeping those necessities out of their reach so that the cost is kept down for the fat cats.

      • Olwyn 4.2.1
        5 September 2012 at 7:10 pm

        A slave is saleable property, whereas a “free” worker is not. if you don’t maintain your slave his value goes down, as happens when you don’t maintain a car. A “flexible workforce” is a euphemism for an easily dispensable workforce.

  5. fnjckg 5
    5 September 2012 at 12:53 pm

    furthermore, the employee on the minimum wage
    -rests to prepare
    -prepares the replacement and subsidary workforce
    -sources own nutrition
    -manages own shelter
    -manages own warmth
    -consumes employers products (interesting)
    -maintains condition to labour productively and efficiently
    -commutes self to place of SLAVERY
    where it is in question when they need to feed and excrete

    • the pink postman 5.1
      5 September 2012 at 2:57 pm

      Workers need a living wage no ifs no buts. A decent living wage,but to make it worth while there mut be a limit on the upper wage.Unless this is done the gap between the wealthy and the poor remains the same. We certainly also need some price controls Working people are the most important people we have they deserve a decent way of life and that includes non waged working people .

      • Colonial Viper 5.1.1
        5 September 2012 at 6:24 pm

        91% tax kicks in at 20x the median income (which in NZ is about $29,000 pa). That effectively caps the maximum income in NZ.

        But, its capital which truly needs more taxing, income is taxed enough as it is.

        • Herodotus 5.1.1.1
          5 September 2012 at 8:15 pm

          Fully support your position re income taxation. I get greatly annoyed at the attack on the PAYE worker, even those at the top end as they have little ability to manage their tax on this sourced income. It is all the other means of income that allow for taxation exemptions. Netting off legitimate income with loss making operations.
          Only wage that should be taxed at a higher rate are those “Golden” handouts for being “Fired”
          http://www.spotless.com/News-and-Resources/assets/Annual-Report-2011.pdf
          View page 49 and beyond of the senior salaries/shares and entitlements

  6. tracey 6
    5 September 2012 at 4:36 pm

    Mps are taxpayer funded. I would like to see them compulsory drug tested, with random testing also. Given the behavior and decisions some make it can be the only explanation… I am not referring to mr parker, merely musing at how child poverty and ill health is less important than testing a few beneficiaries using weed

  7. john ryall 7
    5 September 2012 at 9:24 pm

    Good on David Clark. We need to keep reminding the public of the importasnt jobs that are being done for unliveable wages.