Labour’s new worker policy – $16.25 minimum wage

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Labour’s much anticipated worker policy has been released. It’s a mix of the aspirational and the smart. $15 minimum wage by Christmas this year, bumped up to $16.25 next year while banning the 90 day right to sack laws and killing off National’s latest attempt at strangling the Unions.

Sadly my worker levy idea and universal union membership hasn’t made it, so MANA are more than welcome to use that, but Labour will set up a roaming inquisition that will review the worst cases of worker abuse and attempt to highlight the lack of regulation to build public support, similar to the Pike River example. It is hoped this public scrutiny will make industry wide Union representation an easier sell to the public.

Those machinations won’t mean much to workers right now, but $16.25 by next Christmas will.

23 COMMENTS

  1. I know a cleaning company that has just had to put wages up for their staff on the new minimum wage. It’s costing them an extra $1000 a month. So they are putting their prices up. This happens through all service trades and industry. Prices go up to to compensate for the wage increases. Wage earners have to pay more for everything. So putting the minimum up to $16.25 will only increase prices hence devaluing the increase in the first place.

    • Yes what they’re doing is shifting the balance. It’s be easy to see, who cares, poor people don’t hire cleaning companies anyway – or maybe the bosses could take a pay cut but this is a lot more complicated.

      If the minimum wage rises, it will hardly affect imports and anything involving a factory. Even for high-labour industries the cost increases won’t out-weigh the pay rises so it’s not like the low income earners are going to have ALL their gains wiped out by inflation – which appears to be what you’re inferring.

      All that’s happening is that we’re reversing a process where poor people were forced to take a significant pay cut so that everyone else would have slightly cheaper goods and services.

      It’s either that or they took a cut so the owners could make greater profits – in which case it probably will still be the middle class who has to wear the results as well. Somehow though I imagine the owners will try make everyone focus on the working class v middle class battle while they slip into the background

    • This is a false argument. All you are saying is that you know a cleaning company that pays only the minimum wage. Is that something to be proud off?
      OK, you will now say that the minimum wage is all that the cleaning industry ever pays. In that case all its competitors will have to put up their wages by a similar amount, so your friend will not lose business at the higher rate.
      Now you will say that the cost is merely passed on to the end user. True, but how much of the cost of the average business does cleaning represent? Very little I suspect. And for those high tech businesses that the government raves about, as being where NZ’s future lies, how much will it add to their costs? Zilch.

    • If your’e implying those companies contract to cleaning private homes in poor suburbs mate, your’e greatly decieved.

      Companies that your’e talking about usually are contracted to large industrial concerns that not only can but bloody well should be paying more for the priveledge of having their shitty messes cleaned up.

      Like Parliament, eh.

    • Try thinking a little deeper and you’ll see that minimum wage earners will still end up better off as the increased costs will not be entirely offset out of their pockets. In fact it’s likely that any increased costs caused by hiking the minimum wage will be disproportionately paid for by higher income earners. For example the increased costs to hire a cleaning company are unlikely to impact on minimum wage workers in any serious way.

    • So if the CEO and top management’s wages go up does that mean they have to put up their prices too?
      If this cleaning company has only ‘just’ put up their wages to the new minimum wage they should probably be being investigated as the last increase was in April. By 50c may I note. Those cleaners are the PRODUCTIVE section of that company, not the contracts guy, not the managers, not the owners even. They are wage earner too – you pay a fair wage they have money to pay for the increases in prices they have to pay for CORPORATE pay rises in other industries.

    • Ian, you’re missing a salient point. Higher wages leads to higher standards of living and people buying stuff. Increased wages doesn’t disappear into the either – it is spent.

      Contrast that to profits remitted offshore or into the bank accounts of the 1%, and it’s not hard to see which is better for businesses.

      I’m researching this issue at the moment, and an upcoming blogpost should put a serious dent into the myth that raising wages leads to job losses.

      (In which case corporate CEOs with massive pay increases have a lot to answer for.)

      • SOooo pleased! It’s not just the comparable minginess but the rhetoric thrown in with it “You should be bloody grateful you’ve got anything, you’re such a cost burden on business/ society”. Am really looking forward to your blog – you are awsome!

      • So true, I look forward to your post.

        Consider also that this will affect only the bottom approx 30-40% of earners (embarrassing stat in itself), who are living week to week, so ALL of their income makes it way back to business owners (not out of the economic cycle as you point out).

        One issue that I would like to bring up: As a large percentage of minimum wage earners are also parents, this policy has the effect of moving some of the burden of social responsibility from Govt to employers, where it should be. A family with 2 kids and 2 minimum wage earners will in effect pay some of their increase in wages as tax (due to the WFF & IWTC abatement rates) – It could save the govt millions.

        So there also might be an argument for tax credit abatement rates and accommodation supplement rates/thresholds to be adjusted upwards, so that families can realise all of this wage increase (otherwise single earners will benefit more from this policy and I am sure that it not the intention). The only reason welfare based tax credits are necessary is because of the effect of low wages, high property values and high consumption tax (for many working parent it is totally impossible to live without assistance, minimum wage barely covers rent).

        A living wage needs to be attained sooner, rather than later, but also consider the bigger picture for the massive number of Kiwi’s living from week to week.

  2. We are in the midst of the reversal of the Industrial Revolution, during which fossil-fuel-based economies stagnate and then collapse.

    Raising the minimum wage (or lowering it) will not alter the course we are on, nor will it alter the final outcome.

    The continuing pretence that current economic-social arrangements have a future is depressing.

    • Not on a minimum wage are you, buddy.
      I can’t wait for the collapse or the revolution, unless it comes tomorrow before I have to pay my electricity bill.

      • Sadly it is the nature of man that opinions on taxation and equality are largely seen from the individual perspective (which could be greed or need depending on the position).

  3. A high cost country requires higher wages, and this is totally commendable, and if introduced gradually and carefully, this can lead to a truly growing economy, not one growing only for the top 10 percent.

    Workers listen up, and cast your votes, thanks.

  4. Hmm, so reduce the minimum wage to $1 per hour and prices will drop and everyone will be happy? I don’t think so, no one except the one percent will be able to afford anything and businesses will go broke.

  5. Why do they need a review? Are not citizens advise keeping records? What about the unions – they keep records, or maybe ask the employment lawyers who getting all those calls a week.

    I think the review part is rubbish. And as a radical, I think labour are again weak as piss over wage raises.

    Ian, inflation measured on necessary consumer goods (food, clothing, etc) has already out paced their wages. If a employer has such a bad model to make money, one which relies solely on paying piss poor wages – they shouldn’t be in business in the first place. Business in NZ need to up their game, the cheap labour model is a bad joke.

    • Nicely put…in fact one could also add that many of these shyster employers need to reimburse employees for over 30 years of theft, disproportionate waste of employees man -hours, and deliberate restriction of human potential by depriving people of the means to invest, plan or extricate themselves from the poverty trap.

      Not to mention lives lost due to shoddy saftey standards in workplaces -so we could add to that indirectly manslaughter – by negligence. Sound harsh ?…29 men still lie in a dark mine shaft shaft due to shareholder pressure on management to maximise profits and lack of union mines safety inspectors to adequately cover NZ ‘s mines.

      Lest we forget.

    • Although…i do think they need MORE people on their review panel to be honest..and …I think it commendable that Labour have at least had the guts to introduce policy that can have a major affect on the quality of poor working families……all power to them.

  6. Getting rid of the 90 day rule is great, but spending power would be better increased by putting in a decent tax threshold, upping the marginal tax rates on high incomes, and getting rid of GST.

    • So long as that doesnt end up with something along the lines of what weve got already-whereby the working poor are disproportionly more affected by tax increases contrasted with the well off who barely feel the differnce.

      Get those wages up for the working poor and stop all the palarvering and pissing round.

      Its nothing short of a disgrace how long this has been allowed to go on. And as for this crap argument that industry cant afford it..where does that sort of thinking come from?..

      You guessed it….the likes of the economists paid for by the Business Roundtable.

      Its time those clowns were put firmly back in their box..theye had their time in the sun , took their best shot and caused the shocking conditions we see today.

      Enough is enough.

  7. The rhetoric surrounding minimum wages really needs to be put to bed. There is NO evidence (ya know, sciency thingys) that minimum wage increases lead to job losses. If you look at business wages as a whole ALL wages are a ‘cost’ to a business including that huge amoral wage you pay to your CEO cos they just won’t work for less. Businesses should be paying a fair share of profit to all their workers, particularly the PRODUCTIVE sector.

    • As if it is not bad enough to have to work long shifts, without proper breaks, for minimum wage – One of the most soul destroying impositions on workers is the fact that you yourself could never afford to buy what you are selling.. for instance working retail selling shoes or tvs that are worth more than you spend on food in a week. I wonder how many workers can never afford to shop where they work?

      I know that differentiated wages are part of an economy but there is only so long that people will stand holding grapes all day for a lazy slob before they snap.

      This model of “I put up the money, you do the work, I take all the profit and you’ll be grateful for it” enterprise is just not working.

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