Labour policy for losers

Political parties which think they are going to win an election promote policies to attract voters and that they believe will be beneficial if implemented in government.

Political parties which think they are going to lose elections promote policies to lock in their core supporters.

Labour’s work and wages policy is one for losers.

The Otago Daily Times said legislating for higher wages is counter-productive:

That is because basic economics means money has to be earned. Printing money  . . . or forcing businesses to pay staff more cannot lead, long term, to either more jobs or higher wages.   

The bottom line is New Zealand and New Zealand businesses, in a highly competitive world, have to be profitable. It is they and, particularly the taxes paid by the staff they employ, that earn the money to support public servants, benefits and public services.   

This fundamental truth has been fudged in the West for years, and we are all beginning to pay the price.  Greece exemplifies the fool’s paradise.   

Inefficiencies and dislocation from economic rules have placed that nation on the brink of defaulting on its debts.  In essence, what applies to individuals applies to nations.  Everybody and every country has to earn their living.   

Thus, the productive sector must be fostered rather than hindered, a matter most obvious in export businesses. 

The Press says: it’s very unlikely the policy will boost economic performance and provide a better future for workers:

The policy’s strange mish-mash of bureaucratic centralised wage-setting, legislated higher minimum pay and repeal of some of the present Government’s liberalising workplace reforms has gruesome echoes of the unlovely 1970s. Far from being a forward-looking policy, as the Labour leader, Phil Goff, has declared it to be, it recalls policies long thought dead and buried. . .

According to Goff, the policy would help stem the flow of people to Australia. Given that the effect of much of it would be to price some jobs out of existence, quite how it would do this is unclear. Labour still does not appear to understand that it cannot legislate its way to prosperity. Introducing impediments to the creation of jobs or raising wages by legislative or administrative order will do nothing to close the wage gap with Australia and will, if anything, see more workers decamping for greener pastures elsewhere.

The Dominion Post says the policy is out of touch:

The consequence of hiking the minimum wage from $13 to $15 an hour, as Labour is proposing to do, will be to deny more unskilled young job seekers the opportunity to get a foot on the job ladder. The consequence of telling international film producers it is our way or the highway will be for them to pack their bags. And the consequence of requiring all employers in an industry to offer the same minimum set of terms and conditions will be to ship more jobs off overseas.

The only winners from Labour’s work and wages policy, unveiled on Tuesday, will be unions, which can expect a temporary increase in members and influence.

The NZ Herald says the policy revives the bad old days:

It will not be easy to take the Labour Party seriously at this election if it comes up with any more policy like the one announced on Tuesday. . .

The Labour Party would surely hesitate to propose this if there was much prospect of the party winning the election and having to put the policy into effect. Like one or two other planks in the party’s platform this year – notably the removal of GST on fresh fruit and vegetables – the policy is mainly interesting for what it says about Labour’s condition at present and how much younger members of the caucus have to learn.

This is a policy which would hinder the businesses which provide and create jobs. It’s a misguided attempt by a party trying to legislate its way to prosperity. It would help only unions and would not be considered if the party thought it had much prospect of putting it into effect.

The papers have given a concerted damning and deserved thumbs down to policy which would impose bureaucracy and cost on businesses at the expense of them and their employees.

It is not policy for workers.

It’s policy for losers and the unions on whose might and money they depend.

One Response to Labour policy for losers

  1. Neil says:

    It is sad to see Labour following down the Union line. Legislation generally does not mean that it is the best way. In this case Labour is using it to bankroll the unions. Just look at the background of so many of its mp’s and candidates.Fenton,Beaumont,Little,Moroney,Dyson etc.People who are still singing the outdated version of The Red Flag.
    Putting up wages sounds great, however without a similar rise in productivity means inflationary forces being unleashed.Remember Muldoon’s efforts to turn back the sea in the 80’s.
    Raising the minimum wage by $2 an hour will mean that the already bloated youth unemployment will rise further.
    Unions are necessary but they must be reasonable however when the officials use their position to push for political office from their positions.
    Labour has no answers but “no”


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