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Labour chickens out on $15 minimum wage

Written By: - Date published: 2:54 pm, October 14th, 2008 - 23 comments
Categories: election 2008, greens, labour, wages, workers' rights - Tags:

Labour, why do you do this to me? One day you’re announcing neo-Keynesian policies to help us through the coming recession, then you stand up for the principle that access to education shouldn’t be dependent on the wealth of ones parents, and, then, just when I’m starting to believe that you really are a true Left party underneath it all, you go and refuse to commit to a $15 an hour minimum wage.

As we enter tough economic times, looking after the incomes of low paid workers is vital and has the important flow-on effect of keeping alive economic activity in poorer communities. With the rest of the Left championing $15 an hour, it puts Labour strangely out of step. But, perhaps, that is the point. Maybe Labour is keeping $15 an hour as a bargaining chip for post-election deals with the Greens and Progressives. A cheap, agreeable concession. If that is the strategy, however, it does rely on Labour winning the election first and committing to $15 an hour would have been a great way to ensure that happens. More likely, Labour fears a business backlash from pledging $15 and chickened out.

All in all, a lost opportunity politically, a let down for workers, and a reminder that if you want a truly left-wing Labour-led Government you need to party vote Green.

It’s not all bad news, though. In the same speech as Cullen announced Labour would not be pledging a $15 minimum wage, he did promise that the minimum wage would at least keep pace with inflation or the average wage, whichever rises faster. That’s minor compared to recent increases but better than National will commit to and will at least stop the minimum wage falling behind again as it did in the 1990s.

Cullen also announced that Labour would seek to have more of the Superannuation Fund’s billions invested in New Zealand. A truly bold government would go further and create a development fund tasked with investing in NZ infrastructure, buying back NZ assets, and investing in foreign assets that are crucial to our trade networks. The Superannuation Fund could put money in as could ordinary Kiwis through their Kiwibank Kiwisaver accounts and other New Zealand-based investors. Now, that would be something to vote for.

23 comments on “Labour chickens out on $15 minimum wage”

  1. Tane 1

    Pathetic. Yet another reason to party vote Green.

  2. RedLogix 2

    Nah, I think that at this stage Dr Cullen has realised that all he needs to do to win the election is …ummm .. keep a small target.

  3. Draco T Bastard 3

    All in all, a lost opportunity politically, a let down for workers, and a reminder that if you want a truly left-wing Labour-led Government you need to party vote Green.

    We could always have a left leaning Green-led government.

  4. frog 4

    Thanks for the Green support Steve. Personally I’d also like to see Labour coming out with something big and exciting in the areas of MECA bargaining and freeloading too. Those are two areas that could, with the right changes, really benefit low paid workers.

  5. vidiot 5

    We could always have a left leaning Green-led government.

    And be back in the dark ages, no thanks.

    A truly bold government would go further and create a development fund tasked with investing in NZ infrastructure,

    Yes agree with you on this one, it’s just a pity that if our politicians do the same (and invest in local companies) they get bagged & tagged as ‘inside traders’ for doing it.

    The NZ Super Fund could have brought the Auckland Airport shares, the Wellington Lines, TranzRail, etc – but there are strong reasons for them not to as well (excessive market influence iirc).

  6. Tane 6

    Draco. We could, but it’s unlikely. The Greens have the best policies, but the nature of things tends to be that as their policies become more mainstream they’re adopted by Labour (and eventually by National). They’re also, at least for now, a bit culturally alien from a lot of New Zealanders, and that harms their support.

    Still. Their policies rock. And unlike Labour, they’re able to show some spine under pressure.

  7. RedLogix 7

    And be back in the dark ages, no thanks.

    The Green movement tells us that our current primitive technologies are often needlessly expolitative, wasteful and destructive.

    The next generation of technology will move away from the crude, energy intensive methods that we are currently using, moving instead to a more sophisticated emulation of natures own techniques.

    Evolution is an exceedingly powerful tool, that has allowed all lifeforms to solve exceedingly difficult engineering problems, in very subtle and efficient ways that we are only just learning about. The Greens are all about improving our understanding of the world we are a part of and evolving our technologies and economies into smarter, sustainable forms

    An evolution that progresses us out of the Dark Age phase that the taxcuttasaurous party would have us locked into.

  8. BeShakey 8

    “A truly bold government would go further and create a development fund tasked with investing in NZ infrastructure, buying back NZ assets, and investing in foreign assets that are crucial to our trade networks.”

    But a fiscally responsible government would recognise the risks associated with focussing funds in such a way that reduced diversity. On the political front it might also see the risk of the funds $ becoming a bargaining chip for politicians (it’s easy to see parties requiring that the fund invests in their pet area). All of this would put at risk the gains in the fund that are crucial to its success.

  9. higherstandard 9

    “Evolution is an exceedingly powerful tool, that has allowed all lifeforms to solve exceedingly difficult engineering problems, in very subtle and efficient ways that we are only just learning about.”

    Quite true

    “The Greens are all about improving our understanding of the world we are a part of and evolving our technologies and economies into smarter, sustainable forms”

    Quite false

  10. Draco T Bastard 10

    We could, but it’s unlikely.

    Unlikely ATM but I do see Green support firming up and wouldn’t be surprised if it became viable in the next 5 or 6 election cycles.

  11. Chris 11

    i agree, the minimum wage is a blunt instrument in terms of increasing wealth. I’ve seen it myself, I haven’t recieved a payrise because the minimum wage has gone up. I don’t agree with it, but a minimum wage creates a disincentive to paying people more, especially given that it doesn’t keep up with productivity normally. Perhaps the minimum wage price could be set with a labour exchange, that was unable to go down but went up when actual market conditions allowed. Or if nothing else, a study could be done to see how such a system would react?

    To haphazardly conclude: work rights are good, unions are good, but i still think that there are better things to focus on than just getting a wage rise because the govt. mandated so.

  12. lprent 12

    Draco – nah – their policies will always be nickable.

    The greens tend to appeal to the young and the people who seem to think that policy decisions carry few or no costs. In other words they are unbalanced.

    But most people don’t stay young. Few remain idealistic enough (or so arrogant as to be THAT sure). Often they have kids who make them realize that the world is an even stranger place than they thought.

    I’d add at this point that I don’t have any kids. However I did play a considerable part in bringing up many of the families kids. They’re pretty much all green in tinge (even the redoubtable Rocky) – just as I was when I was younger. I’d assume that they will stay greenish, but I’d also bet that they will start voting centre as they get older.

    The centre is likely to be where their green was earlier….. But I’m a cynical older bastard..

    [and we love you for it. SP]

    [lprent: Hah – SP you need to know when to be bold and when not to. Putting an extra bold in as a moderator on my comment made everyone else become overly bold below. However it was an area that being bold was contraindicated!

    Oh well I suppose you like the greens as well – you’ll figure it out. I wonder if there is a smiley for smugness..]

  13. Daveski 13

    SP – just when i despair that you can’t come out and be critical of Labour, you prove me wrong. Bugger. There goes my rant – what was it?? – about dogmatic fixed positions!!

    I’ve commented before that there is a lot more similarity between the two main parties than you would be lead to believe – National’s me too policies is one example, as is this. Plenty here have noted Labour’s reluctance to turn back the clock over the last 9 years.

    My argument is that MMP is forcing the main parties into the mainstream given the existence of strong small parties in the extremes. Certainly, national has become more mainstream to attempt to get elected – the lessons from 2005 have been learnt.

    Upping the minimum wage now – while noble – would simply be disastrous for those you are aiming to help. If things get tighter, it will lead to further cutbacks in employment.

    I note SP you claim this is cheap and agreeable for post election negotiation. No costings or graphs to back this up? Surely, it would have flow on effect across the economy – a trickle up effect?

    Edit – if this is bold it aint intential!

  14. RedLogix 14

    HS,

    It seems you have little or very selective actual experience or knowledge of Green people.

    They are a fairly diverse bunch, but mostly socially liberal and tend to engage with issues at both a pragmatic and intellectual level. Many are highly technically literate and aware, while others have a stronger bent toward more traditional, organic/spiritual ideas Personally I see them as aspects of the same ethic.

    The Green futurists look forward to refining the useful aspects of the modern world (for instance I expect that the internet will continue to evolve), while migrating away from leagacy techniques that destructive, toxic and damaging. From their point of view the future is loaded with exciting new ideas.

    At the same time, humanity is much older and deeper than the Industrial Revolution. The people who lived in what we casually term “The Dark Ages” were not stupid or unobservant. The average medieval peasant knew things and could do things sustainably that most people in the current Western world have no clue about…. important knowledge that has been discarded or devalued because we have been caught up in the hubris of how very clever we moderns must be. Green traditionalists contribute from this perspective, without in any sense wanting to propel themselves back into superstition and ignorance.

    On the other hand HS, maybe you are right. Your assertion is after all very compelling.

    I guess I’ll have to vote ACT after all.

  15. Jasper 15

    OK, now this is where I really come into my own.

    The problem with NZ, thanks to Muldoon scrapping the compulsory super is the fact business cannot afford to grow, and pay minimum wage of $15
    While I do support the theoretic principles of it as a right, business would not be able to grow with such a high wage.

    The main factors that face NZ Inc in terms of productivity, growth and business expansion is the lack of capital.

    Australia has had 18 years of being able to do this, simply by virtue of their 18 billion super fund.

    Why can NZ Inc not do the same? Well, we can now. Over the next 5-10 years, Kiwisaver Mk 2 will continue to provide much needed funds into our flagging economy (which the treasury report didn’t make much noise on)
    As the superfund grows, there will be a more available for capital which is where business will then be able to deliver better wages.

    Right now, there are only two options for a business to expand – borrow from the bank, or take it out of operational profit.
    Most businesses have to take it out of profit. I had to as I didn’t meet the banks criteria – there were no angel investors to help me grow, and people in this country are almost apoplectic when you suggest they should invest in the sharemarket.

    Its the main reason why Aussie is now ahead of us in terms of wages. Businesses can actually afford to return their profits back to the staff in the form of higher wages as any expansionary capital they require can simply be raised on the sharemarket.

    I do think we will get to $15 minimum wage, but not till 2011 at least. $13.50 should be the next step, then $14, $14.50 and finally $15.
    From 2011, it should be locked in to rise each year at the rate of inflation – as should the tax thresholds.

    Simply raising it to $15 will hurt a lot of businesses, and this is on area I don’t agree with you on SP.

  16. Daveski 16

    LP – I promise I didn’t break it!!!!

    [lprent: Nah – Steve attempted to leave a note on my comment. It was a little too bold 😈 ]

  17. tracey 17

    I s’pose a small mercy is that the Nats (while bleating about NZ exodus) havent been in power. The minimum wage would still be at $7.

  18. higherstandard 18

    Redlogix

    I was under the impression that the Green Party’s was committed to a complete ban in relation to GE ?

    How then does this in any way marry in to your assertion that

    “The Greens are all about improving our understanding of the world we are a part of and evolving our technologies and economies into smarter, sustainable forms’

  19. Chris 19

    great post jasper, you articulated what i was hoping to…except you did it well!

  20. Felix 20

    AAAAAARRRRRGHHHHHH everything went bold all of a sudden

    edit: now it’s normal. Trippy. DOn’t mind me, carry on…

    [lprent: SP got bold enough to leave a note on my comment above. It didn’t go well. ]

  21. Jasper 21

    Cheers Chris,

    Seems like coming from the right side of the left, means that the left of the left have no valid theories as to how else we could increase min wage to $15.

    Apart from “lets think really really really hard, and it’ll happen”

    We need more incentives to encourage people to invest in the sharemarket. Allowing dividends to be taxed at PIE rates would be a start.

  22. nigel lin 22

    Why only raise it to $15. Much better would be to raise it to $30, or even $50. We could all be rich then 🙂

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