John Key has ruled out a $2.50 an hour pay increase for New Zealand’s lowest paid workers but won’t give any indication of what increase he does think is right. He claims that an increase to $15 an hour would cost jobs. I would love to see the advice he got on that.
Anyhow, Employers and Manufacturers’ Association (Northern) chief executive Alasdair Thompson effectively put in the minimum bid for the Right when he suggested an increase of 25-50 cents an hour. 25 cents would be less than inflation, so that’s not a serious proposition unless Key wants to return to the dark days of the 50s-90s when National routinely let the minimum wage fall in real terms. A 50 cent increase would barely keep the minimum wage steady as a % of the average wage. So, $13 an hour is business’s bid.
On the Left, Unite is leading the campaign for a $15 an hour minimum wage. You can support their campaign to get a referendum on the issue here. That would lift the minimum wage nearly back above 60% of the average wage, where it traditionally was before the neoliberal revolution. For the leftish centre, that representative of all things moderate, Trevor Mallard, suggests that with $15 is out for now the government should lift the minimum wage to $13.75 this year, then $15 an hour the next.
Lets see how the options stack up:
In the last few years under Labour, the average wage was going up so fast that even increases of $1.75 over two years was barely enough to keep up. Now that average wage growth is set to slow, there is a chance to make a game-changing move, rather than dick around at 50% or slowly creep up, a decisive move to $15 an hour would restore the minimum wage to around 60% of the average. That option being too much like strong leadership for our Prime Minister, the best option then is the Mallard route, a series of $1.25 increases over 3-4 years would get the minimum wage back into the 66% range where it should be.
Of course, we all fear that Key will do what business wants and go for just $13 an hour. But Key showed last year that he will bend to concerted public pressure on this issue, and that poll showing 61% of Kiwis want a $15 minimum wage will have given him pause. He’s a cunning player of popular opinion, Key. He knows you always give the people half of what they want so you can give them the rest later. I think he will choose to go for $13.75.