With all the half-assed attempts at triangulation and general strategic buffoonery we get from Labour’s front-bench, it’s heartening to see that there are Labour MPs like Louisa Wall and, writing on his Minimum Wage Bill in the Herald today, David Clark:
The truth is New Zealand is a low wage economy. Despite National’s promise of a brighter future and closing the wage gap with Australia, every week a thousand kiwis leave New Zealand for Australia.
Not only is the unemployment rate much lower across the Tasman, and the average wage much higher, the minimum hourly wage is almost $NZ20.
Of course, increasing the minimum wage will come at a cost to business. All up, it’s likely to add about $427-million dollars to the country’s annual wage bill. But that money will not disappear from the economy, it will quickly be spent on essentials, from food, to clothing to school fees.
Inevitably, some business will say they can’t afford to pay more in wages. There will be dire warnings of job losses and a lack of opportunity for young people looking to break into the job market. And if we were talking about a radical increase – to say $30 an hour – that would undoubtedly be true.
But a $1.50 an hour increase is not going to force hundreds of employers around the country to suddenly go bust and sack their workers. In fact, no direct link between lifting the minimum wage and job losses has ever been proved.
From memory the most meaningful studies have been on states in the US that raised the minimum wage while their neighbor states didn’t, and saw no relative increase in unemployment. Anyway, it’s nice to see Labour MPs confronting real issues, and saying stuff because they actually believe it, not because the market research indicates it might be advantageous, or because Paula Bennett said it and it worked for her.