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Congrats on raising the minimum wage John

Written By: - Date published: 1:59 pm, February 8th, 2012 - 66 comments
Categories: wages - Tags:

Shame you couldn’t raise it to a living one though.

The working poor will appreciate the extra $1000 per year coming this April, but it still won’t cover their bills…

I guess we’ll be aiming for $14 by the 2014 election.  Too little.

(But still, far better than the nineties Nats who didn’t raise it each year)

66 comments on “Congrats on raising the minimum wage John ”

  1. james111 1

    Well done John most of the electorate knew aside from the Labour Party that $15 was never going to be a goer, and would have put many more of our youth on the Dole queues.

    When you dont know how to create business ,and only know how to add expense to business it makes it very hard to view any of Labours ideas for growing the economy with anything but sceptisism

    • Kotahi Tane Huna 1.1

      lol like James knows anything about business. Like Bill English has ever done anything but work for the taxpayer. I bet poor James doesn’t even know that we’ve slipped a place on the ease-of-doing business scale since 2008, from 2nd to 3rd.

      In fact, poor James doesn’t have the first idea about anything at all – who can forget how badly ignorant of Air New Zealand’s history he is, after he showed himself up the other day?

      James will now demonstrate this for you all…

    • Ianupnorth 1.2

      Go away james111 – you are simply a post and run troll. I’d love to see you try to exist on $14 per hour.

      • Craig Glen Eden 1.2.1

        I saw James on that TV show the other night “COME FLY WITH ME” Its about as real as James business knowledge and knowledge of Air New Zealand.

    • AAMC 1.3

      How to Save the Global Economy: Raise the Minimum Wage. A Lot.
      BY JAMES K. GALBRAITH

      “What would workers do with the raise? They’d spend it, creating jobs for other workers. They’d pay down their mortgages and car loans, getting themselves out of debt. They’d pay more taxes — on sales and property, mostly — thereby relieving the fiscal crises of states and localities. More teachers, police, and firefighters would keep their jobs. …”

      http://www.foreignpolicy.com/articles/2012/01/03/7_raise_the_minimum_wage_a_lot

    • Daveosaurus 1.4

      Meanwhile, back in the real world, it was Labour that got people off the dole queues and now National’s putting them back on.

    • lefty 1.5

      James 111

      Why should taxpayers have to subsidise employers who won’t pay their workers enough to live on through Working for Families payouts?

      Bloody bludging employers ripping off those who create all wealth through their labour.

  2. Arandar 2

    When your ‘business’ can’t afford to pay its staff enough to live on and relies on the taxpayer to subsidize it, James, it isn’t a business at all – it’s a hobby.

    • aerobubble 2.1

      Cheap oil, easy credit, created an ‘activity’ economy, where crisis had tax payers subsidies thrown at them, and mistakes were opportunities to get loans and fix problems (with the kickback of a localize monopoly).

      Nolonger now its just one giant hobby economy where we package activity on top of the basics and over charge to the nth degree, it has nothing to do with capitalism of free markets, its just cronism.
      That happens naturally at the end of every boom period in evolution, the great culling of companies too smooth in their talk talk, easily irate in the face of gaming changing rules, and incapable of gathering the skill set for the new economy because it’s Greeny socialism.

    • Chris 2.2

      So exempt from tax then?

    • Olwyn 2.3

      +++ Well said Arandar.

  3. vto 3

    Is this what is called throwing the dog a bone?

    But yes, well done. Here’s to getting it up to a level that a man can keep a wife and family on…

    • The Baron 3.1

      Not sure that minimum wage policy is meant to be all about your sexist view of gender roles or a return to 1950s family life there vto, but don’t let me get in your way.

      • Colonial Viper 3.1.1

        1950’s family life. One bread winner who on a single income can feed the whole family, afford a full time stay at home parent for the children and save up a deposit on a house after just five or six years.

        • vto 3.1.1.1

          That’s it CV. Just couldn’t resist the temptation to speak in 1950’s speak. Kind of highlights what has been lost (in terms of the ability of one family to survive on one income).

        • passwordprotect 3.1.1.2

          By my rough calculations that would require a minimum wage of circa 35 an hour or 72k a year

          Doesnt sound that affordable or realistic given that would be a MINIMUM wage and presumably the average wage would be much higher!

          • felix 3.1.1.2.1

            Perfectly realistic given the enormous rise in productivity since the 1950s.

            The trouble is the productivity gains have gone exclusively into profits while wages have, in real terms, gone backwards.

            • Jenny 3.1.1.2.1.1

              Perfectly realistic given the enormous rise in productivity since the 1950s.

              The trouble is the productivity gains have gone exclusively into profits while wages have, in real terms, gone backwards.

              Felix

              Indeed Felix, from my calculations the percentage figure for productivity increase in this country since the 1950s is something north of 60%. (I am not sure of the actual figure because I have never seen it published anywhere. And it could in fact be much higher)

              Consider for a moment the changes since the ’50s

              In finance, in banking, in record keeping, in comparative studies and statistics – Today: Computerisation.

              Then: Hand written or typed Ledgers, mechanical calculators and some rare primitive tabulators.

              In construction, building, mining, transport-
              Today: hydraulic diggers, electric power tools, lasers. C.A.D.

              Then: Petrol driven bulldozers and steam powered diggers and rollers and steam trains, pick and shovel. Hand drawn plans and blueprints.

              In factories – Today: automated and robotised, CNCs and PLCs . All technologies unknown in the ’50s.

              Then: mass production, hi labour intensive repetitive mass human assembly based around the conveyor belt.

              In communications – Today: Satellites, fiber optics, cell phones the internet, photolithographic printing presses

              Then: Telephones, short wave radio, moveable lead letter printing presses T.V.

              In trade – Today: Containerisation, international high speed cheap mass Jet travel.

              Then: Steam trains, Steam ships, low speed expensive propeller driven air travel.

              Globally fewer workers are creating more wealth than ever before in human history. All those who say there is not enough surplus to pay, for health care, or pensions, or welfare, or climate change mitigation is a liar. Worse than that, they are criminal.

              These same criminals will argue for low wages to grab even more of the surplus of modern production for themselves.

              New Zealanders of the ’50s wouldn’t have put up with it.

              Why do we?

              • Oscar

                “Why do we?” Why indeed.

                The answer is probably along the lines of what that Ian guy on Nat Rad said the other night before Kerre Woodham cut him off…

                “The 4 million sheep in this country are blind to their own ignorance”

                • Jenny


                  We are not sheep. Anti-apartheid, anti-nuclear, anti-Vietnam war, anti-schedule 4, thoroughly prove that. New Zealanders care deeply and are often moved to action, sometimes heroic action.

                  So why do we put up with falling living standards while wealth creating productivity goes through the roof?

                  Because politicians and business leaders have abused our spirit of self sacrifice. “We” (not meaning them of course), “must all tighten our belts for the good of the country”, they say.

                  “You” (Not meaning them of course) “should not be greedy”, they say.

                  “Greed is good”, they like to say for themselves.

                  And so it has proven.

              • Draco T Bastard

                We’ve been told, for 30 odd years, that the market is always right and that people are where they are due to their own decisions and so most don’t really question why some people are rich and most others are in poverty. They don’t realise that the CEO of PoAL with his $750k salary takes $2k per year from every single worker there. Add in the directors and the cost per worker adds up to some serious cash.

          • Colonial Viper 3.1.1.2.2

            By my rough calculations that would require a minimum wage of circa 35 an hour or 72k a year

            It used to be done so why not now mate? Don’t you believe in ‘progress’?

            • passwordprotect 3.1.1.2.2.1

              I do CV I do…but realistic options only not pipe dreams…

              My calculations below show that to raise minimum wage to 35 an hour to meet your stated ‘aim’s’ (3.1.1) would cost NZ$100bn pa…circa 50% of our GDP. Where is this magic pot on money?

              ………………………………………………………………………………………………………………..

              Cost required to fund CV’s minimum wage that needs to be sufficient to:
              1. One bread winner who on a single income can feed the whole family, afford a full time stay at home parent for the children; and
              2. save up a deposit on a house after just five or six years

              Assumption 1: To support a family of four with one income to a ‘reasonable’ standard of living requires 60k a year.

              Assumption 2: Require a 50k deposit (500k house @ 10%) within 5 years – need to save 9k after tax a year (plus compound interest) – pre tax earnings of ~12k

              60 + 12k = 72k annual income requirement

              @ 52 weeks and 40 hours a week gives a per hour rate of $35

              Based on current min wage of $13.50, that is an increase of 21.50 per hour. Lets say is $20 an hour increase 🙂

              Presumably this will flow across all income levels – for example the guy that was on $15.50 before vs minimum wage of $13.50 is still going to demand (at least) a $2 differential in pay rates post the new minimum wage

              So 20 per hour increase (@ 52 weeks and 40 hours a week) across 2.5m workers is an increase in our annual nationwide wage / salary bill of NZ$104bn (circa half of our GDP)

    • Wonker 3.2

      Keep a wife on? Surely you jest – but 14k from WfF for a “man” on $13.5 an hour 40 hours a week (assuming 3 kids under 12) would go some way towards funding the 1950s nuclear family ideal.

  4. belladonna 4

    Shame those beneficiaries who, through no fault of their own get no assistance. They are the ones
    who are really suffering. Good though that the low income workers get a token amount of help.

  5. Uturn 5

    From The Herald site:

    “Wilkinson said the Government was advised raising the minimum wage would result in up to 6000 job losses.

    “The hospitality industry and retail industry are most affected by it and they will just employ less people or not take people on.”

    The priority was ensuring people had jobs, she said. ”

    No one questions this. Ever. I give up.

    • McFlock 5.1

      Because they don’t want to. Repeating the dire warning like a parrot sells more copy and serves their masters more effectively than pointing out that it’s a wet dream with little basis in fact and that the model applied to the Labour givt minimum wage bump assumes that youth unemployment would not have increased as we entered the GFC.
       
      It’s propoganda, and yet tories claim that the laws of economics are as immutable as the laws of physics.
      Alchemy, more like.

    • KJT 5.2

      Who do they think buys their products and services.

  6. fender 6

    Yes folks fifty cents an hour will give ya twenty bux extra for a fourty hour week. Poverty problem solved just like that, while the likes of Marryatt got something like thirty bux an hour increase!

  7. The Gormless Fool formerly known as Oleolebiscuitbarrell 7

    Raise it to $700 an hour. We’ll all be rich! Rich I tells ya!

    • Lanthanide 7.1

      No, we should drop it to 10c an hour. That way everyone can have a job!

      That seems to be the only aspect that Wilkinson is interested in:

      Wilkinson said the Government was advised raising the minimum wage would result in up to 6000 job losses.

      “The hospitality industry and retail industry are most affected by it and they will just employ less people or not take people on.”

      The priority was ensuring people had jobs, she said.

      • The Gormless Fool formerly known as Oleolebiscuitbarrell 7.1.1

        I heard Russel Norman saying that people in Universities had proven that the level of the minimum wage had no effect on employment.

        My plan would therefore seem to be entirely without a flaw.

        • vto 7.1.1.1

          That’s a neat meeting in one of those non-euclidean geometries mr formless

        • burt 7.1.1.2

          The Gormless Fool formerly known as Oleolebiscuitbarrell is right. We can’t have it both ways. Either lifting the minimum wage has an effect on employment or it doesn’t.

          So who’s Labour stupid enough to think lifting it to $700/hour wouldn’t put people out of work and create insane levels of inflation ?

          • felix 7.1.1.2.1

            “We can’t have it both ways. Either lifting the minimum wage has an effect on employment or it doesn’t. “

            Of course at the absurd extremes there’s a pronounced effect.

            But it’s not actually “having it both ways” to note the absurdity of both the $7000 figure and the 50c figure burt. It’s more “stating the bleeding obvious” really.

            An equally valid question is “why $13.50?”

            Surely that’s costing jobs too, right? Surely if the minimum wage was half that we’d have twice as many minimum wage jobs and eliminate unemployment overnight.

            Wouldn’t we?

            • The Gormless Fool formerly known as Oleolebiscuitbarrell 7.1.1.2.1.1

              That would be OK except Russel was quite adamant. Science has proven that the level of the minimum wage has no effect on employment. I have no reason to disbelieve him.

              If you have a problem with this science, Felix, I recommend you take it up with the Green party.

              • felix

                I suppose the Greens have lost your vote now that you’ve discovered to your horror that they disagree with you about economics.

                Ah well. They lost mine for not having a beardy leader. I mean 4reals, a greenie without a beard? Get out of here. I can’t respect that.

                • The Gormless Fool formerly known as Oleolebiscuitbarrell

                  But, as I think I have been at pains to point out, I completely agree with them in their bold policy to raise the minimum wage to $700 an hour. This is just common sense once one accepts (as one must) that there is completely no evidence to show that there is any link whatsoever between the level of the minimum wage and the level of employment.

                  If only we’d thought of this before. Like all of the best ideas, it is so obvious when you just think about it for a bit.

                  The lack of beard thing is disappointing, I admit. But it is nothing compared to having solved the whole: how-can-we-get-rich-without-actually-doing-anything thing.

                  • felix

                    I imagine we’d be subsidising employers fairly heavily at 700 squid an hour though, perhaps even more than we subsidise them now.

                    Still, at least it’d be a direct subsidy rather than pretending the employee is the one getting the handouts.

  8. bbfloyd 8

    is this pay increase tax free? as in $13.50 gross +50c? or can i assume that tax will be payable on the whole amount? which makes the $1000 figure an inflated one….

    the other question i have is , i can quite clearly remember the minimum wage being put up to $13.25 not so long ago.. last year if i recall correctly….

    i fail to understand why an important issue like this should be debated using innacurate, and irrelevant figures…. and yes, i know there will be a number of those out there who will sneer at the approximately $100 tax paid on that pay rise, but to someone earning that little, that’s quite an important distinction….

    there have alresdy been calculations used in arguing how that money can be spent that don’t take the tax removed before the payee receives it…. i understand that the tax department, and winz uses gross income as a guide to making entitlement/debt decisions,.. but out here in the real world, we live in a “net wage” reality…..

    is it too much to ask that a debate be grounded in reality?

    • Oscar 8.1

      Read and weep

      So no, never has been a $13.25 hourly rate.

      50c *40*52 = 1040 gross. After tax of around 20% works out at $830nett a year or just $15.96 a week. Sweet, that’s 1 rockmelon $5.99 New World Thorndon, 1kg of Peaches $4.99 NW Thorndon and perhaps 4L of milk $4 at NOSH, with about 98c left over to save.

      Big whoop.

      I think it’s time for a progressive flat tax.

  9. lefty 9

    The only reason we don’t have slavery is it would cost employers more to feed and house a worker and their family than it does to pay them the minimum wage.

    • vto 9.1

      ha ha ha

      nuts hell

    • burt 9.2

      That’s probably true actually lefty. Just shows how the unintended consequences of well meaning economic intervention can be negative.

      • felix 9.2.1

        lolwut burt?

        What’s the “negative” you refer to here? Just to be clear.

        • burt 9.2.1.1

          felix

          The clue is in the first sentence. “That’s probably true actually lefty”.

          I can’t see how you could possibly not understand that – but then again you do seem to be incapable of understanding that socialism is a failed ideology.

          • RedLogix 9.2.1.1.1

            So before socialism there was no slavery?

            • burt 9.2.1.1.1.1

              If you say so.

              • felix

                Trying to find out what you’re saying actually burt.

                Wanna spell it out for me? I’ve had a long day and as you know I’m a bit slow at the best of times.

                • Draco T Bastard

                  From what I can make out, burt’s telling us that he’s in favour of slavery and that people are now worse off as an unintended consequence of the do-gooders removal of slavery.

                • It’s simple burt-world logic felix:
                  – If the minimum wage was raised it would cause unemployment to rise, therefore
                  – If the minimum wage was lowered it would cause unemployment to fall, and
                  – If slavery were reintroduced it would eliminate unemployment both completely and permanently.
                  – Therefore slavery is good, and making it illegal was wrong. Because freedom is only for those who can afford it.
                  It all makes sense if you don’t think about it.

  10. Blue 10

    What got my attention when reading the articles on this on both Stuff and the Herald was which parties responded to this announcement.

    On Stuff, Winston Peters led the charge from the opposition parties, along with Russel Norman from the Greens.

    The Herald had Winston, Russel and Darien Fenton from Labour.

    David Shearer was MIA.

    • felix 10.1

      Yep I noticed that too.

      And not just on this issue either, it was the same (on radio nz anyway) over section 9 the other day.

      Ah well, at least someone’s being an opposition.

  11. Harry 11

    All this means is that from 1 April the price of a coffee at my local will rise by about 20c, all the fast food menu prices will be set a wee bit higher, ditto things like movie tickets, groceries at the supermarkets -all offsetting the extra cost in labour. As such, the benefits of the wages rise to the very young and the unskilled who are on the minimum wage will be negated and they’ll lose out too. I would have thought that the way to lift wages would be to increase productivity not artificially raise up the bottom? Otherwise, it beats me why they haven’t raised the minimum wage to $18-19 an hour?

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