GUEST BLOG: Gerard Otto – Simon Bridges and the Minimum Wage Increase

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The minimum wage pay boost, from $16.50 to $17.70, will see around 200,000 Kiwis benefit.

This is a 7.3% increase and National tend to limit increases to about 3.3% or so…sometimes less.

National tends to accept about 4000 job losses every time they put up the minimum wage.

Mr Bridges told TVNZ1’s Breakfast this morning that the Government “should increase the minimum wage every single year”, but added the $1.20 rise will add undue stress to many of the small businesses which are “doing it tough”.

But how many is that?

This was very vague language from Simon ( as per usual ) so I looked up the job losses that may have been possible in the cabinet paper put forward.

Turns out the number is between 5000 and 9000 possible job losses if there was no minimum wage increase at all according to MBIE.

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But countering that effect is the estimate that jobs will increase by 56,900 in 2019 anyway.

So the net result is an increase in jobs of around 48,000 – 52,000 for New Zealand anyway.

So what is Simon really freaking out about?

There are around 499,944 small businesses in New Zealand and the vast majority of these, in fact 70% or 390,961 businesses – have only one employee – the sole trader.

So it’s not going to impact those 390,961 small businesses at all.

Zilch a mindo.

Nada.

Zero.

Of the remaining 108,983 small businesses with between 1 and 19 employees, only a small portion of them employ anyone on the minimum wage at all because many need higher skilled people with experience.

Perhaps there could be 20% of them that employ people on the minimum wage?

Big businesses can absorb these costs in general.

But what about the workers – who are they?

“About a quarter of those earning the minimum wage – 36,000 people – are parents, with children,” Lees-Galloway said.

The total extra pay is around $48 extra a week to put bread or milk or some vegetables on the table for these parents.

So overall – given children are effected in 36,000 cases, and we’ll still increase the number of jobs, and the vast majority of small businesses are not impacted at all….and big business can handle it.

I’d say it’s more of a good thing, than a bad thing.

Especially given the massive wealth inequality in this nation, the rising cost of living and the fact that around 2,664,000 people are employed in New Zealand ..of whom 92.5% earn more than the minimum wage.

This seems like the right thing to do to me.

Then again I would say that.

Given I run a small business.

Bloody socialists.

 

Gerard Otto is an activist and a writer.

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11 COMMENTS

  1. As an owner of a small business that employs 7 , I could not agree more. All our employees are on a wage above $20 per hour. We’ve never had anyone on the minimum wage except for an occasional part-timer who will benefit from this wage increase.
    I 100% support the wage increase.

    • Why are couples on the minium wage having children . These are obviously the 1/4 million children in poverty. It would be better for all concerned if before taking on the commitment of children the government encouraged them to learn skills that would improve their earning potential . Many of those on minium wage will not benefit much by this wage increase as they will lose government subsidies such as accomodation benefit .

      • In effect, what you are advocating is only affluent people having families. You’d be blaming the poor for a neoliberal system that crushes their aspirations.

        Good luck getting support for economic eugenics.

  2. As Grant Robertson rightly said, “we may have to pay a little bit more for that cup of coffee”.

    What Grant insinuated is that those that can afford “Bought” coffee, a minimum increase into their daily or weekly fix will make no difference. For Simon to say it will cost jobs is to be disingenuous and my favouriite National word, scaremongering..

  3. soimon who claims to care but wants the low waged to get 50cents increases at a time based on this he will never me our PM thank goodness for this.

  4. NZ has had a low wage economy since time began. I normally support national but on this I believe they are wrong. As the article shows it shouldn’t be a business killer, and even at the new minimum wage getting ahead in life will be a challenge. Time will tell how inflationary it is but it will have to get in line with a huge amount of other expenditure this Government deems necessary..

  5. Wages should vary a lot more, and the minimum kept low- it should depend on what costs are- like rents.

  6. Ah…? Wages go up by bugger all, so the banks increase interest rates by bugger all, so the waged slaves who were promised more vegetables money instead end up paying banks extra for their bugger all increase in loans/mortgages and insurances.
    Does that mean we, as consumers, pay more for the services of small businesses who must pay ever more to the banksters via costs after they force waged slaves to work harder? Jesus! No wonder there’re so many Ferrari’s in Auckland.
    I say, fuck higher wages and instead go and get our stuff and things back off roger douglas.

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