Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


Unite Union Welcomes Minimum Wage Increase

Minimum Wage Increase Good, But We Need to Protect Margins for Skill And Service

Unite Union has welcomed the increase in the minimum wage from April of 75 cents an hour.

We see this as just a modest first step in improving the minimum wage to achieve the government's objective of $20 an hour by April 20121.

The next three years will require an increase of over $1 an hour each year to reach the target.

Employers and right-wing economists will claim that any increase in the minimum wage will increase unemployment.

Most serious academic studies internationally actually find the opposite is the case.

The same is true in New Zealand when the adult minimum wage increased by 33% from 2004 to 2008. The proposed increase over the next four years is less than that percentage increase.

Inflation during that period was 12.5 per cent, so there was an increase in the real value of the minimum wage. There was also an increase in its relative value: rising from 45.4 per cent to 50.6 per cent of the average wage.

During the 2004-2008 period the unemployment rate declined from 4.7 per cent to 4.2 per cent. The Labour force participation rate increased from 66.7 per cent to 67.7 per cent

Youth unemployment and participation rates were almost unchanged.
Inflation averaged 3 per cent a year while the minimum wage increase averaged over 8 per cent a year.

Some of the biggest increases in the minimum wage have occurred for young workers. In 2001, 18- and 19-year-olds were put on the adult rate. By 2005 their rate had more than doubled from $4.55 an hour to $9.50 an hour.

Were young people priced out of the labour market as the dogmatists assured us would happen? No, in fact, the opposite happened. Employment for this group increased overall and unemployment dropped.

The big challenge for unions how is maintaining margins for skill and service. The increases in the real value of the minimum wage has compressed margins for those above. This is part of the reason employers are complaining about a lack of skilled labour - they have removed incentives to increase skills and used immigrant labour instead.

Unite Union is committing to fight to restore those margins in bargaining next year.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On Our Military Roles In Iraq & Afghanistan

The politics of the deployment extension have degenerated into a slanging match about whether the previous National government was right or wrong to make the initial commitment to Iraq – and whether the extension is a responsible thing given our joint training role in Iraq with Australia, or is hypocritical in the light of prior statements made by a previous Labour leader etc. etc. etc.

As usual, the benefit – or otherwise – of our military presence to the people on the receiving end has barely had a look in. More>>


Commissioner To Be Appointed: Govt To Dismiss Board Of Whitireia And WelTec

Education Minister Chris Hipkins has made a preliminary decision to appoint a Commissioner to Whitireia and WelTec to address the two polytechnics’ financial woes. More>>


Open Government Action Plan: Government To Proactively Release Cabinet Papers

The Cabinet papers will be released no later than 30 business days after a Cabinet decision. This process will be in place for Cabinet papers lodged from 1 January 2019... More>>


NZ Initiative: Evidence Of "Huge" Government Waste

It is not so much that spending is being literally wasted. Rather the best performing countries are achieving much better outcomes relative to their spending. More>>


Gordon Campbell: On The Ardern Pep Talk

The intolerance being shown as the coalition process unfolds in New Zealand betrays our depressing appetite for a tidily totalitarian style of government where everyone is expected to march in lockstep. More>>


Last Two: All Charter Schools To Join State System

The decisions on Tūranga Tangata Rite in Gisborne and Waatea School in Auckland mean that all 12 charter schools that applied to become designated character or state integrated schools have now been approved. More>>





InfoPages News Channels