There was quite an interesting discussion on the minimum wage yesterday after a poll showed 61% of Kiwis back a $15 an hour minimum wage, and I thought it would be good to lay out my thoughts.
First, increasing the minimum wage changes the division of wealth between labour and capital. It gives more wealth to the poorest workers by taking a little from what are, by and large, big wealthy foreign-owned companies (the supermarkets, the fast food brands, the retail chains).
Now, I know you righties are all modern-day marvels. Born in a log cabin, you have pulled yourself up with no help from anyone except a public school system, public health system, the minimum wage, and all those other trappings of socialism. If you can do it, why can’t everyone else?
Well, leaving all that rightwing myth-making aside, let’s think about this. In our economy we can’t all be lawyers, managers, techs and the like. People in those jobs can only function thanks to people doing the often unpleasant, oftern dangerous, less-rewarded jobs – cleaners, factory workers, labourers, and so on. The work needs doing and the people need to work.
Now, the question is: what is the minimum decent amount a person should have to work for? What is the minimum fair amount for a human being to give over their labour? Unless you support slavery, you must agree the amount is greater than zero. So, we’re in agreement that a minimum wage is just, now we only need determine what level it should be.
The poverty level is generally recognised as 66% of the average income. It seems unjust that any person working full-time should be below the poverty line. So, a minimum wage of at least 66% of the average wage seems like a good target to me*. Hence why Labour initially set the minimum wage at 83% of the average wage (and, to the neoliberal economists’ eternal confusion, unemployment didn’t skyrocket and the economy didn’t collapse) and has sought – ever more gradually, unfortunately – to restore the minimum wage to a level above the poverty line.
Ok, last point. The more sophisticated righties like to pretend their objection to the minimum wage is not because they want labour to be cheap and capital to get the lion’s share of wealth but because they are concerned for the poor. Apparently, raising the minimum wage by a 20% would see thousands of jobs disappear. ‘You have to be underpaid. It’s for your own good’ they say while clamouring for tax cuts for themselves.
The problem is, no-one can present any serious evidence of this, only a few neoliberal papers that inevitably have a piece of mathematical circular logic hidden in their depths that mean the conclusions always magically match the economists’ pre-concieved beliefs (economics really is nothing more than politics in the disguise of maths). The reality, as we know from looking at the way labour is underutilised and employers don’t bother to invest in tools and training in places like India compared to places like Sweden, is that higher wages encourage employers to get more out of their workers leading to a more productive and more prosperous society.
Every time the minimum wage has gone up in the past we have failed to see the rise in unemployment routinely predicted by representatives of the Right like the Business Roundtable. Instead, we have seen thousands of Kiwi workers and their families lifted out of poverty and their children given a better shot at life, and no evidence of job losses.
So, a minimum wage of at least 66% of the average wage is just, we have had it in the past without problems, and it would hugely improve thousands of Kiwi families’ lives. Seems like the right thing to do to me.
*(I know, the average wage and the average income are different things but I think it works as a rule of thumb)
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