$16 minimum wage ‘just a start’

Labour is planning to lift the minimum wage from $14.25 to $16 an hour in its first year in government – and that’s just the start.

Unions have been lobbying Labour on the issue, but the pressure is still on; they want much more.

Labour leader David Cunliffe is comfortably nestled between Labour’s union affiliates.

“Colleagues, comrades – we are part of a broad labour movement,” says Mr Cunliffe.

The unions are strong within that movement. They are pushing hard for a jump in the minimum wage.

Labour has already indicated two increases in its first year – one before Christmas from $14.25 to $15 an hour, and today came the details of the second.

“Even that’s starting to look a bit stingy, so we’re looking at a further increase within the first year,” says Labour’s labour spokesperson Andrew Little. “I expect it will be up around $16 an hour.”

So $16 an hour by April next year – for the unions leaning on Labour, it’s a pay-off, but just a start.

A pay-off for unions but extra costs for employers, price increases for customers and less job security for workers.

“It needs to be more, above $18, but it certainly would be a big boost,” says president of the Auckland Service and Food Workers Union (SFWU) Jill Ovens.

“I think the second increase needs to be more than $16; it needs to start moving to two-thirds of the average wage over the term of the Government,” says CTU president Helen Kelly. . .

New Zealand does have a problem with low wages.

But if pay increases are to be sustainable without boosting inflation and threatening jobs and the businesses which supply them, they have to be linked to productivity increases and the ability to pay them.

Add other Labour policies which will reduce flexibility and increase regulation and businesses and the jobs which rely on them will be even less secure.

Unions which regard a $16 minimum wage as just a start could find it is also the end to some jobs and some businesses.

8 Responses to $16 minimum wage ‘just a start’

  1. TraceyS says:

    Research shows that giving additional rewards not linked to performance or competency can have a detrimental effect on motivation. As someone who believes strongly in self-determination this is of concern to me.

    Now that is not likely to be the case for people with family responsibilities who are on the minimum wage, struggling, and desperate. But for others there needs to be a firm link between better pay and personal improvement eg. performance, skills, and responsibility taking. In this situation, pay increases – even small ones – can have a motivating effect and that’s good all-round.


  2. homepaddock says:

    People with families won’t be better off – all and more they gain from a pay rise will be lost from Welfare for Families payments, increased KiwiSaver payments, Carbon tax . . .


  3. Captain Fantastic says:

    Raising the Standard of Living is directly linked to capital accumulated and employed in an economy, as well as economic freedom, property rights, sensible governance, regulation minimalism etc. This is discussed if I remember correctly in Henry Hazlitts excellent book “Economics in one Lesson”.
    The equation: “Mans material progress equals Human Energy multiplied by Tools (capital) “. A most sensible book.
    Instead, here in NZ we have massive State consumption of resources, diminishing property rights, control freak micro-management, growing over-regulation, token free-hold.
    The state of affairs that created Gods own country is becoming rapidly eclipsed by the grim reality of socialism/statism.

    One final point to consider. Who ends up paying for these increases? Obviously it is the consumer? What is the point of all getting pay rises if costs go up? It will put even more out of reach. GST alone will ensure that. Go figure !


  4. RBG says:

    Homepaddock, the carbon tax policy is for a charge on carbon that will be returned to all households as a Climate Tax Cut on the first $2000 of income.


  5. Labour have found their sweet-spot and are speaking directly to Kiwis. Schooling done the way we are comfortable with and believe, wages that are better than those offered now and fair. Labour’s on the button with their pitch and now you Right-wingers are on defence and that’s an unfortunate position for you to be in. For you, not for the Left or for the country. “Things” are shaping-up nicely now, thanks. You’ll be deeply regretting the mess Parata has made of the education portfolio – people are well aware, despite her waffling on and on, that her initiatives lack integrity. On the wages thing, there’s no way New Zealanders aren’t going to like hearing that the basic level is to rise as soon as Labour and the Greens become the Government. Argue your Rightwing ideology as much as you like (til you’re blue in the face) lifting the minimum, the low level wages is something very much supported by the majority.


  6. TraceyS says:

    A rise from $14.25 per hour ($29,640 pa) to $16.00 per hour ($33,280 pa) for a family with two kids and one parent only earning minimum wage would not abate the amount of Family Tax Credit and In-work Tax Credit entitlements. Now if the other parent started working then, yes, they would most likely cross the threshold where the entitlements start abating sooner owing to a rise in the minimum wage.

    I see this as a major disincentive to work.

    Captain Fantastic is correct. The more meddling (or control freak micro-management as he calls it), the more twisted the incentives become. Forcing people to join Kiwi-saver and manipulating their savings rates to deal with centralised issues of inflation and interest rates would have to the greatest abomination ever imagined. Clever only on paper.

    Families will never be “better off” in the holistic sense as long as the government is playing them like puppets.


  7. robertguyton says:

    “a big bag of words that mean nothing”

    Hekia Parata according to Dimebag Russell.


  8. Paranormal says:

    RG we’ll see come election day. It will be a rout for the left, especially if Kelvin ousts the far north racist.

    As for education, parents are seeing good results from Nationals policies, regardless of what you might say. It may come as a surprise to you but normal people aren’t that energised by politics or politicians, and people have amazing forgetorys (as opposed to memory). They will have already forgotten Nationals ill managed attempt to increase class sizes. But they do like the sound of paying good teachers more.

    As for the economy, it’s only those looking for a hand out that see Liarbours policy as worthwhile. At this stage in the cycle the majority can see what it is – just more buggering up of the economy by the left. In particular people understand what raising the youth rate did for their children looking for work. they don’t want that repeated.

    It all comes down to the left are toast in 2014.


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