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National bows to minimum wage myths

National bows to minimum wage myths

Press release: ACT New Zealand
24 March, 2014, 7:05pm

National's move to increase the minimum wage by 50 cents this April is yet another example of the Government's lack of resolve when it comes to economic issues, says ACT Leader-elect Jamie Whyte.

"The economists in the National Party aren't stupid, They know that this will have adverse effects for New Zealand workers and the economy. Yet they continue to intervene in wage rates, in an attempt to position themselves as moderates," says Dr Whyte.

"In doing this, National perpetuates the myth that minimum wages protect the poor.

"John Key has skimmed over the inevitable consequences of this intervention, saying job losses will be 'relatively negligible'. What Key doesn't acknowledge is the unseen effects of minimum wages -- those businesses which don't directly lay off workers will be discouraged from employing more, or replacing those who leave voluntarily in future.

“The best thing that low skilled workers can do is get work experience. It's hard to think of a crueller policy than passing a law that bans the people most in need of work experience from getting any.

"Furthermore, many businesses will pass on their increasing employment costs to the consumer, contributing to the rising price of living which many New Zealanders have come to accept as normal.

"ACT doesn't think it's okay for the state to put up barriers to employment. Nor does ACT think it's okay for the state to intervene to drive up the cost of living.

"Only ACT can provide the economic spine so badly needed in any center-right government."

ENDS

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