Government botches chance to jumpstart the economy – First Union


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Government botches chance to jumpstart the economy


While the government confirms the minimum wage will rise 50 cents to $15.25 an hour, a trade union representing low paid workers is criticising the “meagre” increase as a missed opportunity to assist the lowest paid workers and boost the economy at the same time.


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“There’s still an enormous gap between the Living Wage, what working people and their families need to survive and thrive, and the minimum wage.  The new living wage figure is due to be released later today.”


“In our submission to the Minimum Wage Review in October 2015 we called for a minimum wage that’s at least two-thirds of the average wage, or $19.46. That brings us much closer to what working people need.”


“With a low CPI and the threat of deflation, New Zealand is in a unique situation.  It could have substantially increased the minimum wage to boost spending in the economy (as the Reserve Bank has called for); reduced inequality; and given working people the peace of mind that they cannot be paid less than they need to live.”


“A significant increase to the minimum wage would have ticked all the boxes,” says Reid.


“But the government has ticked none.”



    • We’ve already got the highest minimum wage in the OECD. To suggest we go even higher requires the unions to consider the impact on overall employment. This problem is only going to get worse as increased levels of automation make the unemployment cost of a higher minimum wage even higher.

      If we want to top up incomes at the low end, we could consider introduction of a working tax credit or reduce the bottom rate of taxation.

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