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PQ 10. Minimum Wage—Increases

10. Minimum Wage—Increases

[Sitting date: 31 July 2014. Volume:700;Page:10. Text is subject to correction.]

10. ANDREW LITTLE (Labour) to the Minister of Labour : What measures, if any, will he take to lift pay rates so that workers on the minimum wage get their fair share of the economy?

Hon SIMON BRIDGES (Minister of Labour): The Government is committed to growing the economy through the recent Budget and the Business Growth Agenda, and ensuring that everyone gets a fair and growing share of the pie. This includes our year-on-year increases to the minimum wage, which now sits at $14.25 and is one of the most generous in the OECD. The April increase of 50c was higher than the CPI increase, which helps ensure the lowest-paid really do get a fair share of economic growth.

Andrew Little : In light of his public comments yesterday that increasing the minimum wage according to Labour’s policy will cost jobs, why does he continue to make that claim when the last Labour Government increased the minimum wage by 70 percent and saw unemployment fall to as low as 3.5 percent—then the lowest in the OECD—towards the end of its term?

Hon SIMON BRIDGES : Because all of the advice that I have had shows that raising the minimum wage quickly and unsustainably, like the member wants to do, would result in 6,000 New Zealanders who are in jobs right now losing their jobs. So I think that the policies announced by the Labour Party yesterday should properly be seen as unemployment policies.

Andrew Little : Why does he continue to claim that raising the minimum wage causes job losses when the last Labour Government more than doubled the training rate, from $4.20 an hour to $9.60, and saw the unemployment rate for 15 to 19-year-olds drop from 16.5 percent to a low of 11.8 percent in 2005—a rate that has been consistently above 22 percent since 2009—after this Government introduced youth rates and the hated 90-day, no-rights law?

Hon SIMON BRIDGES : It is, of course, a question of where the minimum wage starts. We start right now with a minimum wage that has gone up by, I think, 19 percent since we have been in office. At $14.25, it is the highest minimum wage in the world, relative to average wages, and is the fifth-highest in real terms in the world—past three European countries and Australia. Taking it to $16.25 at the start of the next year would result in thousands of New Zealanders losing their jobs.

Andrew Little : Why does he continue to claim that raising the minimum wage causes job losses when the United States Department of Labor recently advised that after reviewing 64 studies on minimum wage increases, it found no discernible effect on employment, and when the United Kingdom Low Pay Commission commissioned over 130 pieces of research from economists—

Hon Steven Joyce : What happened to 30 bucks an hour? Why not 30 bucks? Why not $35?

Andrew Little : —Mr Joyce, you might want to listen to this and learn a few facts, for a change—and found that minimum wages—

Hon Steven Joyce : No, you could learn a few facts. Why not $35, Andrew?

Andrew Little : —sensitive, Mr Joyce, sensitive—boost workers’ pay but do not harm employment?

Hon SIMON BRIDGES : Without being an expert on the United States, what is very clear is that it is starting from a much lower base in terms of its minimum wage than we are. Where we start, as highest in the world relative to average wage, makes it very clear that we put people out of jobs if we do otherwise. It is also clear that in New Zealand we are talking about a country made up of small and medium sized businesses that actually need increases in productivity and growth to take on more people. That is why the 90-day trial, the starting-out wage, and all of these policies that National has been promoting are creating real jobs for real people, not unemployment policies, like Labour announced yesterday.

Andrew Little : When will he and his Government come into the 21st century and accept that a fair minimum wage that allows workers to earn a decent income and live in dignity lifts productivity, is good for business, and is good for all New Zealanders?

Hon SIMON BRIDGES : We are already, of course, in the 21st century and we know that the policies we have got are creating jobs. I would like to know when the Greens will start supporting the 7,000 people in oil and gas in Taranaki and the Labour Party will do something about an appalling policy that would see something like 16,000 New Zealanders in the film industry put out of jobs. [Interruption]

Mr SPEAKER : Order! I am just waiting for the cousins to finish their discussion.

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