National has always claimed to be the party that is really good with the economy.
This is an undeserved reputation. Historical analysis shows that the economy performs better under Labour Governments and that ordinary wages and employment rates increase at a greater rate under Labour Governments. Perhaps there is a link?
In its never ending quest to sound like it knows what it is talking about when it comes to inflation National Deputy Leader Nicola Willis said yesterday that it was a great shame that the minimum wage had increased by so much because it means the Government can’t do it now to help low-income Kiwis make ends meet without stoking inflation.
From Radio New Zealand:
“The great shame is that Labour increased the minimum wage so much in previous years, but what you’ve seen has happened is that they have not been able to increase it as much in these inflationary years because they know it will be passed on.”
In his first Budget as finance minister, Grant Robertson hiked the minimum wage by 4.7 percent, followed by a 7.3 percent boost in 2019. Since then, the increases have been 6.8 percent, 5.8 percent and in 2022 – the first year of abnormally high inflation – he put it up 6 percent, more than the year before.
This year’s minimum wage hike, if there will be one, has not yet been announced. National and the ACT Party have opposed Robertson’s hikes in the past, but warnings they would boost unemployment have not come to pass.
Last year Christopher Luxon came out with similar nonsense when he said last February that National supported increases to the minimum wage at the right time but weirdly could not say if it was the right time or not.
From Henry Cooke at Stuff:
National leader Christopher Luxon says his party supports raising the minimum wage “at right time” but can’t say whether he supports the upcoming boost.
The Government has announced the minimum wage will be hiked to $21.20 an hour on April 1, up from the current $20 an hour – a boost of 6 per cent.
In opposition, National has generally opposed minimum wage hikes, with former leader Simon Bridges repeatedly saying the hikes went too far too fast.
…
Asked again if that meant National supported the proposed boost, Luxon said National supported a “consistent increase in the minimum wage, that’s what we did in Government, and we will continue to do so here”.
National raised the minimum wage every year it was in Government by either 50c or 25c, from $12.50 in 2008, reaching $15.75 when it left office in 2017 – an average of 2.9 per cent every year. Labour in Government has hiked it from $15.75 in 2017 to $21.20 in 2022, an average of 6.9 per cent every year.
Willis’s proposal would mean that workers on the minimum wage would have felt the effects of inflation even more keenly because they were starting from a very low base. And can you imagine National deciding that a large increase is justified because of inflation if they were in power? They would come out with the same rhetoric about how small businesses could not afford it.
And here is the essence of why this debate is so frustrating.
Wage increases depend significantly on what has happened in relation to inflation in the preceding year. It is a catch up adjustment designed to ensure that the real level of wages do not drop. A wage increase below the rate of inflation is a wage cut. Insisting that workers should shoulder the responsibility of dealing with inflation pressures means that employers and companies do not.
At a time when inequality is still growing insisting that workers should carry the burden of inflation through effective wage cuts will only make things worse.
If, and I hope this does not happen, National gain power it will be a sure bet they will cut taxes and minimum wage increases. The poor will be subsidising the wealthy.
When the next minimum wage increase is announced I would hope that it will be at least at the rate of inflation. Otherwise workers on minimum wages will be going backwards.
Update: And National has walked back Willis’s statement.
Powered by WPtouch Mobile Suite for WordPress