Minimum wage: what will it be?

Written By: - Date published: 9:56 am, January 27th, 2010 - 93 comments
Categories: workers' rights - Tags:

The Government is set to announce its decision on the annual adjustment to the minimum wage today. So what’s it going to be?

The three main positions out there are:

  • Business lobby: Hold increase down to 50c an hour ($13 an hour).
  • Unions: Step-change of $2.50 an hour ($15 an hour).
  • Labour: $1.25 increase this year ($13.75), followed by another $1.25 next year to take it to $15 an hour.

A poll conducted by the NZ Herald showed 61% of New Zealanders support the union position of an immediate increase to $15.

Which position do you think John Key will back?

93 comments on “Minimum wage: what will it be? ”

  • Comments are now closed

  1. Lew 1
    27 January 2010 at 9:58 am

    $0.75 — a compromise position, which isn’t really.

    L

  2. Chess Player 2
    27 January 2010 at 10:10 am

    I would hope he backs the full $15 and then later reduces the top income tax rate.

    Both of which are well overdue.

    • Lanthanide 2.1
      27 January 2010 at 10:33 am

      Sorry, but the top rate is fine – Oz has a top rate of 45%, ours is only 38%.

      The problem is fiscal drag and bracket creep. The top rate threshold should be pushed out to 150k or so, to stop penalising high-paid-but-not-rich workers (those on <$100k) and giving them incentives to move overseas.

    • toad 2.2
      27 January 2010 at 10:35 am

      Key ruled out $15 last week.

  3. roger nome 3
    27 January 2010 at 10:14 am

    What would you do to fill the govt revenue gap then CP? BTW, my pwn’s got you in check.

    • Chess Player 3.1
      27 January 2010 at 10:45 am

      Reduce as much of WFF as possible

      • roger nome 3.1.1
        27 January 2010 at 10:53 am

        Oh – so you would increase hardship for working families, so that the rich can play a little harder in Fiji. Gotcha. Look at the board, i think you’ll see that was mate in two moves.

        Perhaps we should play again some time?

        • Chess Player 3.1.1.1
          27 January 2010 at 11:17 am

          No, obviously WFF would be reduced from the top end, not the bottom end of the entitlement catchment, thus delivering the full $15 to the lowest paid.

          Also, re the chess move references, if you know of a forced checkmate in two moves that involves a check using a pawn, I’d love to know that….or are you just being an idiot?

      • IrishBill 3.1.2
        27 January 2010 at 11:07 am

        I agree with abolishing working for families but only if it goes hand in hand with legislation guaranteeing better wages (such as an award system).

        The last government had an unfortunate habit of picking up the tab for business rather than forcing it to pay its own way. The wage subsidy that is working for families is a classic example of this.

        • roger nome 3.1.2.1
          27 January 2010 at 11:13 am

          I’m sure that i’ve typed an almost identical post at one time or another.

        • TightyRighty 3.1.2.2
          27 January 2010 at 3:16 pm

          here here lprent. i see roger trying claim some common sense, but you’re the one seeing wood lprent.

  4. Monty 4
    27 January 2010 at 10:16 am

    it is stupid and opportunistic to increase the minimum wage above what the market can stand. No person should be paid more than their economic contribution. To do anything else reduces the opportunity for job creation.

    Labour do not seriously back such increases – except they want to be seen to helping “ordinary people”. National should raise it (if they have to raise it) what ever the inflation rate is – (2% ?) that would be about $0.30 per hour. Sounds too much to me even at that in this time of high unemployment.

    • mickysavage 4.1
      27 January 2010 at 10:34 am

      Labour do not seriously back such increases

      You have to be joking. It was raised from $7 poer hour to $12 per hour during Labour’s reign. There were increases every year. The comparison to the average wage also increased but more slowly only because the average wage went up so quickly.

      • mcflock 4.1.1
        27 January 2010 at 10:45 am

        Labour only increased it because of the requirements of their coalition partners.

        Personally, I reckon it should be $17p/h, cut gst and put in another top-level tax bracket at 50%.

        Anybody who emigrates (although that’s been threatened for years) improves NZ with their departure.

        • crapulent 4.1.1.1
          27 January 2010 at 10:53 am

          Like Helen ?

        • mickysavage 4.1.1.2
          27 January 2010 at 10:53 am

          Labour only increased it because of the requirements of their coalition partners.

          BS

          Prove it.

          Bloody leftie historical revisionists.

          • Tigger 4.1.1.2.1
            27 January 2010 at 11:11 am

            Peter Dunne wanted the minimum wage increased?

          • mcflock 4.1.1.2.2
            27 January 2010 at 11:24 am

            I’m no psychotherapist or expert on others motivations, but a quick google shows one or two press releases that have Labour minimum wage increases consistently being less than their coalition partners’ wishes, but my favourite one is :

            http://www.stuff.co.nz/business/182308 Last updated 00:00 01/01/2009

            “The movement fulfils, ahead of schedule, a deal struck with support parties after the last election. ”

            “Bloody leftie historical revisionists.” Yeah, sorry “mickeysavage”, I forgot Labour is no longer left wing…

    • Roger 4.2
      27 January 2010 at 10:53 am

      “No person should be paid more than their economic contribution”. What is the economic contribution of a currency trader? Is it the same as people like supermarket workers who look after the $250-800k worth of product in their stores that people spend over a million a month buying. Is $13.59per hour not below their economic contribution?

    • roger nome 4.3
      27 January 2010 at 10:56 am

      Monty:

      You’re letting puritanical, mono-dimensional ideology get in the way of a very complex question. Most people don’t think of their communities as simply being businesses. Come down to the real world and join the rest of us why don’t you?

      ya know – imortal words of J.L – “better recognise your brother, join the human race” ….

  5. fizzleplug 5
    27 January 2010 at 10:21 am

    You need to remember that the mentioned poll wasn’t exactly wide-ranging in it’s choices. Statements like the one made can be very misleading, especially as a basis to attack the Government when it doesn’t raise the minimum wage to the level indicated.

    • Lanthanide 5.1
      27 January 2010 at 10:35 am

      It also wasn’t 61% of New Zealanders. It was 61% of New Zealanders that answered the poll.

      Sloppy, Eddie.

      • snoozer 5.1.1
        27 January 2010 at 11:09 am

        by that logic National doesn’t have the backing of 52% of Kiwis, just 520 of the 1,000 people Roy Morgan rang.

        sloppy, lan…

    • felix 5.2
      27 January 2010 at 10:38 am

      Indeed.

      “We asked people if they’d like more money. Results after the break”

      Skepticism is definitely in order.

      Equally skepticism is warranted when asking the EMA and the BRT what they think is an appropriate rise.

      “We asked people if they’d like more bills” etc.

  6. Eric Crampton 6
    27 January 2010 at 10:22 am

    ipredict says 94% chance the increase is at least 25 cents and about a 36% chance it’s over 75 cents. Think the odds are wrong? Free money for you! Go trading!
    https://www.ipredict.co.nz/Main.php?do=browse&cat=5

  7. IrishBill 7
    27 January 2010 at 10:32 am

    It’ll be 50c.

  8. toad 8
    27 January 2010 at 10:34 am

    I’m picking a 50 cent increase. It is being announced by Wilkinson rather than Key so it is certain to be disappointing..

  9. mickysavage 9
    27 January 2010 at 10:35 am

    Which position do you think John Key will back?

    Whichever position he backs he will be relaxed about it …

  10. PT 10
    27 January 2010 at 11:10 am

    fifty cents is more than enough, the country can’t afford anymore since we’re just coming out of a recession, any higher will stop new jobs being created which is bad for the poor

    • DeeDub 10.1
      27 January 2010 at 11:46 am

      HOW will it stop new jobs from being created? Please don’t just trot out the old Tory line of how it’s just ‘self-evident’ or ‘common sense’… it isn’t.

      PROVE it. Got any definitive studies which prove a link between a decent, livable minimum wage and less job creation?

      Didn’t think so.

      • PT 10.1.1
        27 January 2010 at 11:48 am

        unemployments still rising, means business cant afford to keep people, push up minimum wage and it will be harder for business to pay for more people, what part of that dont you understand

        • DeeDub 10.1.1.1
          27 January 2010 at 11:58 am

          PT no-one has EVER been able to provide proof of any link between higher minimum wages and reduced job creation.

          You may very well have a belief that is based on things as you understand and experience them, but that belief is not backed by anything but your own myopic view and limited experience.

          Show me the proof?

          • PT 10.1.1.1.1
            27 January 2010 at 12:40 pm

            so why not increase the minimum wage to a hundy an hour, good idea then everyone will be rich, hey presto and nobody will lose their job

            stupid analysis from a stupid leftie

            • fraser 10.1.1.1.1.1
              27 January 2010 at 2:21 pm

              so no proof then? hell, not even a debatable study?

              • PT …
                27 January 2010 at 2:58 pm

                as soon as you lefties say pushing up minimum wage doesnt affect jobs, I say why not push it to a hundy then and then you stop arguing it doesnt affect jobs

                you lefties are so stupid

              • BLiP …
                27 January 2010 at 3:17 pm

                Until you right wing nuts stop repeating meaningless mantras you will forever be doomed to a bleak ignorance.

              • TightyRighty …
                27 January 2010 at 3:21 pm

                BLeak Ignorant Person – BLiP

              • BLiP …
                27 January 2010 at 3:28 pm

                Hehehe . . not bad. Tightywhitey, worriesome and trying at the best of times.

              • felix …
                27 January 2010 at 3:33 pm

                I never knew TR had a funny bone.

              • TightyRighty …
                27 January 2010 at 3:35 pm

                weak BLiP, use what you’ve got before you make shit up

                Anti-spam: contribute

              • BLiP …
                27 January 2010 at 3:44 pm

                Are you able, please, to provide a single example of where I have just made stuff up? I think you might have me confused with Petey.

            • felix 10.1.1.1.1.2
              27 January 2010 at 3:09 pm

              so why not increase the minimum wage to a hundy an hour

              If bananas are so tasty and nutritious, I should eat a hundred of them every day.

              If that cold beer was so refreshing, I bet a hundred would be really refreshing.

              Reductio ad absurdum, dummy.

              • The Baron …
                27 January 2010 at 3:28 pm

                Not quite felix… I don’t agree with PT necessarily but your analogies don’t match.

                People wouldn’t eat or drink that much because it is either physically impossible to do so, OR would make themselves sick, or would cost them too much.

                What are the negative barriers to overconsumption of wages?

                But PT does make a good point before he goes all mental – if there isn’t a consequence then why are you limiting the request to $100? How unambitious! Who is selling the working poor out now?!

                Lets try the much hated common sense again (and no, I can’t be f*cked trawling for a study), it seems pretty simple to me – any increase in wages has to be funded somehow. The majority of the left wing voices here assume that that can be afforded by trimming profits – and maybe they can, but i doubt that for every business.

                For the others, they will need to pass the cost of labour increase onto their customers in the form of higher prices. So, all other things being equal, costs go up, and dollars go less further – meaning cost of living gets a lil bit worse for all in the medium term.

                And for some others again, who cannot raise prices or cut profits – well one assumes they will keep their total wage bill the same by cutting back on the number of positions they have, and hoping for a productivity increase OR accepting crappier performance.

                Have I missed something? Does none of that make sense without some high-falutin paper?

              • BLiP …
                27 January 2010 at 3:30 pm

                Red wine is healthy – so why not drink a bottle every hour.

              • felix …
                27 January 2010 at 3:43 pm

                Point taken Mr Baron, those were lazy analogies which don’t line up exactly, but I think they do point out the futility of substituting one number for another and expecting the equation to yield the same answer.

                “if there isn’t a consequence then why are you limiting the request to $100?”

                Here you make the same mistake as PT. It’s not a question of there being no consequences.

                The question is whether the balance of consequences is positive or negative – if there are negative consequences are they outweighed by positive ones?

                PT assumes that the answer to this question will be the same no matter what numbers you use. That strikes me as, well, a but dumb.

              • PT …
                27 January 2010 at 3:51 pm

                no stupid, if there are consequences putting minimum wage up to a hundy an hour, then there are consequences putting minimum wage up to fifteen an hour especially when jobs are being lost. i argue there are consequences putting minimum wage up, its lefties here who say there are no consequence. killed yourself with your own stupid argument stupid

              • felix …
                27 January 2010 at 4:08 pm

                Read it again dummy. I never made any such argument.

        • toad 10.1.1.2
          27 January 2010 at 12:28 pm

          There is actually research that refutes the neo-liberal assertion that increasing the minimum wage stops new jobs from being created. Like this one.

          The research compared the impact of changes in the US Federal minimum wage in New Jersey with changes in the neighbouring state of Pennsylvania where state minimum wages were already above the Federal minimum and remained unchanged. Thus Pennsylvania played the role of a ‘control’ in the study. On balance, the increase in the minimum wage raised employment, rather than lowered it.

  11. vidiot 11
    27 January 2010 at 12:08 pm

    75 cents – slight increase over rate of inflation.

  12. Pat 12
    27 January 2010 at 1:01 pm

    “It was raised from $7 poer hour to $12 per hour during Labour’s reign.”

    $5.00 / 9 years = $0.55c average per year. On that basis, calling for a $2.50 increase looks like a pipe-dream.

    • PT 12.1
      27 January 2010 at 1:05 pm

      and what was economic growth and inflation over those nine years. putting up the minimum wage in recession is soooo stupid

      • snoozer 12.1.1
        27 January 2010 at 1:21 pm

        in the last two years of labour it went up $1.75%. remember, PT as numbers rise the increase has to rise too if the percentage increase is to remain the same.

      • mickysavage 12.1.2
        27 January 2010 at 2:58 pm

        Economic growth was pretty good actually and the funny thing is that the more that ordinary people have to spend the more they spend on local services and goods and the more local businesses thrive thereby allowing them to pay higher wages.

        Not understanding the relationship ot the link is “sooo stupid”.

  13. Brett Dale 13
    27 January 2010 at 1:19 pm

    Probably they put it up to around 13.25 or something?

  14. The Voice of Reason 14
    27 January 2010 at 1:29 pm

    PT:

    Can you please put up some facts to back your assertions. Just writing ‘bs’ or asking others to provide the facts (‘and what was economic growth and inflation over those nine years’) is lazy. You are coming across as a teenage tory lightweight, all zits, ego and angst. The level of debate here is generally pretty good and views from the right are fine, but please try and engage your critical faculties before you write.

    In regard to your comment at 1.05, lifting the AMW is exactly what is needed to help lift us out of the recession. Most of the rest of the western world has primed the economic pump by putting more money in circulation, either directly to business or via methods such as tax credits. Any more money given to the working poor will be spent immediately here in NZ, therefore helping Kiwi businesses survive, grow and prosper.

    Wages don’t kill businesses, PT. Lack of sales certainly does, though.

    • PT 14.1
      27 January 2010 at 1:46 pm

      why stop at 15, why not push it to a hundred? because business cant afford it and jobs would be lost, duh. you dont get out of a recession by killing busines.

      • felix 14.1.1
        27 January 2010 at 3:13 pm

        Why stop at 5 fruit & veg a day? If they’re really so bloody healthy then why not eat a thousand a day?

        Dummy.

  15. mickysavage 15
    27 January 2010 at 1:40 pm

    TV3 is reporting it will be $25c increase.

    Skinfliunts …

  16. Living Wage 16
    27 January 2010 at 1:41 pm

    “The government throwing 25 cents to minimum wage workers is a cheap shot” said Campaign for a Living Wage organiser Joe Carolan.

    This is barely 2% of nothing, and will be well below real inflation when his government raises GST in the budget.”

    “Low paid workers are sick of being insulted by millionaires like John Key. We’ll be initiating for action on the back of this slap on the face, and there’ll be a loud and angry protest this afternoon at 5pm at Auckland’s Chamber of Commerce on Mayoral Drive”.

    “What workers need is a living wage- we’ve been pushing for $15 an hour now, and for the minimum wage to be set at 66% of the median wage. Tens of thousands of people have signed our petition for a Citizens Initiated Referendum, but John Key has infuriated the half million workers earning less than 600 bucks with this derisory pittance”.

    CAMPAIGN FOR A LIVING WAGE
    PROTEST TODAY 5pm
    AUCKLAND CHAMBER OF COMMERCE
    MAYORAL DRIVE

    Contact-
    Joe Carolan 029 44 55 702
    0800 2 UNITE
    joseph@unite.org.nz

    • PT 17.1
      27 January 2010 at 3:30 pm

      thats about right, nil increase would have been better when we have unemployment rising to encourage employers to hire cheap staff but at inflation is about right good decision from government

      • mickysavage 17.1.1
        27 January 2010 at 3:33 pm

        I know why don’t we cut everyones wages by half?

        That way there will be twice as many jobs, won’t there?

        I am being facetious PT.

        There is a good example of what happens where wages are reduced by the effects of inflation.

        It is Zimbabwe.

        Is this the sort of economic model you support?

        • PT 17.1.1.1
          27 January 2010 at 3:49 pm

          no i don’t support zimbabwe model because they printed and spent money they didnt have, very inflationary. a bit like the last laboru government spending money we didnt have on government waste which is why we now have so much debt in the next ten years savage. but if we cut the minimum wage yes it would create more jobs for poor people good idea!

          • mickysavage 17.1.1.1.1
            27 January 2010 at 3:52 pm

            Why am I treating the views of someone who does not use capital letters as worthy of debate?

            • PT 17.1.1.1.1.1
              27 January 2010 at 4:03 pm

              why am i treating somebody who puts up stupid arguments and is as stupid as you who thinks putting up the minimum wage doesnt affect jobs as worthy of debate. forget about grammar savage, you are too stupid to debate substance.

              • mickysavage …
                27 January 2010 at 4:06 pm

                Hey PT you did not answer Toad’s comment above. He said:

                Did you bother to read the research I linked to before typing “bs’ PT?

                And if you think the research is flawed, please enlighten us all as to how?

                How about an answer?

    • BLiP 17.2
      27 January 2010 at 3:43 pm

      Woopdee fucking doodle dee doo. What a bunch of heartless fucks, they really are.

      Thanks National Ltd® – I’m lovin’ it.

    • Draco T Bastard 17.3
      27 January 2010 at 4:39 pm

      Yep, less than the rate of inflation. So, JK doing his utmost to keep his and NACTs promise to lower wages.

  18. Brett Dale 18
    27 January 2010 at 3:29 pm

    Heck thats a bit low, 25cents an hour extra anit much.

    • felix 18.1
      27 January 2010 at 3:34 pm

      It’s not any extra in real terms.

      • jagilby 18.1.1
        27 January 2010 at 3:47 pm

        If it were extra in real terms then you don’t think you’d hit relative pay issues. i.e. people earning slightly more than minimum wage wanting slightly more…or do you think increasing amounts of people will be happy being reduced to the lowest common denominator?

        I’ll tell you what happens in the real world. An increase above inflation will result in those above minimum wage demanding a pay increase. Then what happens… Oh yes, inflation.

        Then what? Oh we’re pretty much back to square one – no increase in real terms.

        It’s simple stuff people.

        • A Nonny Moose 18.1.1.1
          27 January 2010 at 3:58 pm

          Oh those damn poor people, always wanting more. What ingrates.

          • jagilby 18.1.1.1.1
            27 January 2010 at 4:08 pm

            ^^^ Clearly lacks an understanding of the implications of inflationary pressures.

            I’ll make it simple for you:
            Minimum wage increase > CPI inflation
            =
            Increase in inflation
            =
            Increase in price of household goods
            =
            Poor people no better off.

            Actually poor people worse off because:
            Increase in inflation
            =
            Increase in interest rates
            =
            Increase in mortgage rates on investment property
            =
            Increase in rents

            I’m sure it makes a nice sound bite for you to say otherwise though and I’m sure you must sleep easy at night with all those votes you may gain by misrepresenting the situation to all those poor people on low incomes.

            • felix 18.1.1.1.1.1
              27 January 2010 at 4:14 pm

              Can you explain how the rises in the minimum wage over the last decade managed to stay ahead of inflation?

              Perhaps your theory only applies under National governments?

              • PT …
                27 January 2010 at 4:18 pm

                because it was a tight labour market f, minimum wage increases werent higher than wage inflation generally. what labour wants is minimum wage artificially held up much higher than general wage inflation when labour market weakening. you lefties are so stupid not to see it

              • felix …
                27 January 2010 at 4:22 pm

                But jagilby says lifting the minimum wage causes general wage inflation.

                You really need to learn to read, dummy.

                Also, change your name again. You’ve made such a dick of yourself with this one in just two days, no-one is ever going to take you seriously.

              • BLiP …
                27 January 2010 at 4:39 pm

                Hmmmm – okay, I give up, who was Petey?

              • BLiP …
                27 January 2010 at 11:30 pm

                Ahhhh . . . now I get it.

            • mickysavage 18.1.1.1.1.2
              27 January 2010 at 4:20 pm

              But increases in wages do not require an equivalen increase in the cost of a good or service. There is no linear relationship.

              How about this, it is just as simplistic.

              Increase in company profit > CPI inflation
              =
              Increase in inflation
              =
              Increase in price of household goods
              =
              Poor people worse off.

              • PT …
                27 January 2010 at 4:44 pm

                no direct link between increase in company profits and inflation stupid. direct link between increasing minimum wage and labour costs duh. increasing labour costs in recession depresses job market stupid.

              • mickysavage …
                27 January 2010 at 4:54 pm

                PT, is that you Kate Wilkinson?

              • Sonny Blount …
                28 January 2010 at 2:01 am

                Actually its more like this:

                Increase in company profit > CPI inflation
                =
                Increase in wealth > Increase in inflation
                =
                Increase in wealth > Increase in price of household goods
                =
                Everybody better off.

              • Zorr …
                28 January 2010 at 2:34 am

                Sonny… only if that wealth is shared… and truly rich people don’t get that way by sharing their pie

  19. Sonny Blount 19
    28 January 2010 at 8:37 am

    By that logic (bigotry), minimum wage workers don’t earn their money, poor people are criminals, and people on the dole are bludgers.

    Are you suggesting that an increase in compnay profit does not help the economy?

    If that is the case, why are the wages of barristas so different to those of IT technicians? as I thought it was due to the amount the company was able to charge for the product they produce (ie profitabiliity of the venture).