Blog: A stingy evidence-averse decision on the minimum wage

A stingy and evidence-averse decision on the minimum wage

by Denise Roche

As I predicted in my blog post last week, John Key’s Government has announced today what amounts to a nil increase in the minimum wage – a paltry increase of 50c an hour. The nominal increase is 3.8% – but at the same time the Consumer Price Index increased 4.6% in the year to September 2011 and 1.8% in the year to December 2011. So it is not “boosting incomes” at all, as Minister of Labour Kate Wilkinson claims, it is just keeping pace with inflation.

50c an hour is not going to help the people that need it most – people like the Bradley family who were profiled in the Herald this week, where dad is having to work three jobs just to feed the family. And even so, the parents are having to go without food some days just to feed the kids.

What we need in this country is a living wage – one which pays enough for families to be able to feed and clothe their children, pay the rent or mortgage, pay the power, phone and doctor’s bills, and not slide into debt when something unexpected happens.

The Government will tell you that increasing the minimum wage to a decent level will cost jobs. Indeed, last year John Key claimed that increasing it to $15 an hour would cost 6000 jobs. This has not been shown to be true – in fact the NZ Council of Trade Unions has done an extensive literature review which indicates there is no clear evidence, either internationally or in New Zealand, of a causal relationship between moderate increases in the minimum wage and employment or unemployment levels. But, despite the evidence not supporting John Key’s claim, Minister Wilkinson is still banging on about the fictional 6000 job losses.

What we do know is that hundreds of thousands of New Zealanders are experiencing poverty and hardship on a daily basis – and on this basis 50c simply doesn’t cut it.

The Green Party wants to see an increase in the minimum wage, first to $15 an hour and eventually to two thirds of the average wage. This will help both reduce inequality and poverty and reduce the reliance of many low-income New Zealanders on taxpayer-funded financial support.

We need to lift wages across the board. We need a Government that will actually care about families struggling to get by in New Zealand.

Published in Economy, Work, & Welfare by Denise Roche on Wed, February 8th, 2012
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