David Clark (Labour MP for Dunedin North) has come up with a number for the likely cost of increasing the minimum wage, and also makes some more statements in Views split on minimum wage in the ODT.
The Clark points:
- $427 million as the most likely cost
I’m seeking clarification on whether that just covers wages increasing to $15, or if it also takes into account wages currently on $15 that would get pushed up.
- Increasing the minimum wage to $15 per hour would ensure hard-working families could put healthy food on the table.
There’s no doubt increasing the minimum wage would help some families (and some single people and childless couples) but “hard-working” and “healthy food on the table” is waffle.
- Making the minimum wage $15 an hour will be a big help to about 264,000 workers and their families.
The amount of help will vary as those already earning close to $15 will only get a small increase. There is no indication of the average increase.
- The $13.50 an hour was well below Australia’s minimum of an equivalent $NZ19.92.
That’s an issue and one of the reasons for a Kiwi exodus to Australia. But increased costs may lead to job losses, so Australian wages may be even more enticing.
- A higher minimum wage encourages employers to engage in industries with high productivity.
Does that mean employers pull out of industries with lower productivity? And less productive workers become unemployed non-workers?
- It means employers can’t get wealthy off the back of cheap labour.
- An economist could be eligible for a Nobel prize if he or she could establish a direct link between putting up the minimum wage and increasing unemployment.
You don’t need to be an economist nor a Nobel prize winner to see the distinct possibility that forcing business costs up in very difficult economic times is likely to lead to job losses.
- The proposed change will not affect most employers and smart employers who already pay a living wage will be better off as it will stop less scrupulous firms undercutting them.
Clark’s response to business group concerns:
He dismissed the arguments put forward by John Scandrett (Otago-Southland Employers Association chief executive) and John Christie (Otago Chamber of Commerce chief executive), saying BusinessNZ was running the “same line” throughout New Zealand.
Clark is running a few lines too, some of which seem to be well rehearsed union lines. He doesn’t seem to have a good understanding of business realities.
It seems very unlikely the minimum wage bill will get past it’s first reading in parliament.
But Clark’s dissing of Dunedin business leaders and his anti business rhetoric does not look good for MP-business relationships in Dunedin. Nor New Zealand.