Minimum Wage (Contractor Remuneration) Amendment Bill

A Member’s Bill put forward by David Parker has passed it’s first reading tonight by one vote.

Minimum Wage (Contractor Remuneration) Amendment Bill

The purpose of this Bill is to amend the Minimum Wage Act 1983 to extend its provisions to apply to payments under a contract for services that are remunerated at below the minimum wage.

For: Labour, Greens, NZ First, Maori Party, United Future

Against: National, ACT

Explanatory note:

General policy statement

People engaged as contractors have few of the protections of employees. They can be paid at a rate which is less than the minimum wage.

The purpose of this Bill is to amend the Minimum Wage Act 1983 to extend its provisions to apply to payments under a contract for services that are remunerated at below the minimum wage. Currently certain types of work, such as pamphlet deliveries, are not subject to any minimum wage requirements because remuneration is paid under a contract for services. The Bill provides for such contractors to be paid not less than a minimum rate, equivalent to the minimum wage.

As is the case for the minimum wage, the rate can be either hourly or on a piece rate basis.

Parker’s speech:

Salad, fatty and a minimum wage

Apart from an amusing juxtaposition of pseudonyms this from  Affordable housing at The Standard suggests a lack of appreciation of an affordable state of welfare.

Salad

$15 is NOT a “living wage”.

 fatty

True…but it could be if it was introduced alongside a more ethical tax system, such as the first $27000 earned is tax free, and abolish GST.

Also need free healthcare, free education, food in schools, universal child supplement, state housing etc.

‘Fatty’ could do with considering who is going to provide all the muscle – or maybe they have bought Russel Norman’s money printing proposal.

Moving to Australian minimum wages

National have announced a ‘Starting Out” minimum wage…

…for eligible 16- to 19-year-olds to be paid no less than 80 per cent of the minimum wage.

The current minimum wage is $13.50 so this makes the Starting out minimum $10.80 per hour.

David Shearer says this will fuel an exodus to Australia

… “it’s not going to create jobs by driving down wages”.

“We need an economy that provides decent, secure jobs and good incomes and where young people have hope and opportunity, not the low-wage vision promoted by National.”

“These people are going to leave and go to Australia.”

What will they get if the get a minimum wage job in Australia?

National Minimum Wage (Australia)

For junior employees, the minimum rates are:

  • Under 16 years of age  $5.87
  • At 16 years of age   $7.55
  • At 17 years of age   $9.22
  • At 18 years of age   $10.90
  • At 19 years of age   $13.17
  • At 20 years of age   $15.59

For apprentices, the rates are:

  • Year 1 of apprenticeship $10.22
  • Year 2 of apprenticeship $12.08
  • Year 3 of apprenticeship $14.87
  • Year 4 of apprenticeship $17.65

These will be effective for 12 months – until they step up to the next age bracket.

Australia’s minimum wage is $15.96 per hour or $606.40 per week.

Wendy – the roof painter’s ex wife?

Whale Oil has blogged about David Shearer and his beneficiary roof painter story, with an emphasis being put on ‘story’:

Shearer Admits Rufus Paynter Is Ergh..Maybe… Not Real

Can we believe if what MPs are telling us, is true or a descriptive story? Maybe they should be open and honest.

From the draft transcript from parliament yesterday. Is ‘Wendy’ the ex wife of Rufus the painter?:

Dr DAVID CLARK (Labour—Dunedin North): I move, That the Minimum Wage Amendment Bill be now read a first time. If it becomes apparent during the debate that scales have fallen from sufficient National members’ eyes and the Minimum Wage Amendment Bill has the necessary support, I will nominate the Transport and Industrial Relations Committee to consider the bill.

I want to start by telling the story of a woman I met recently. We will call her Wendy. Wendy is up at 4 a.m. and off to her first cleaning job. She works two jobs. She is home at 6 p.m. and tuckered out.

Wendy does not smoke and she does not drink.

Wendy cannot afford luxuries, and for her that now includes heating her house.

She recently suffered a broken leg on the job, and receiving 80 percent of her wage whilst off work meant she could not meet her rent. This proud woman, who has successfully raised six kids, mostly on her own, had to rely on assistance from a family member for help.

The story does not stop there. Wendy still has one kid at home—a teenager with hollow legs.

Feeding her family comes first, but, as a diabetic, her health is suffering in the long term. Her doctor tells her she should eat a more balanced diet. She knows what that is, but can no longer afford the ingredients. White bread is cheaper than brown bread.

Wendy is on the minimum wage and has worked all her life. Restrictions on adult and community training mean she cannot afford to retrain.

She fears she will one day have to reside in a boarding house.

A minimum wage of $15 an hour will mean $60 a week for our lowest-paid workers over a 40-hour week.

David Clark’s unemployment claims disputed

In an opinion article promoting his $15 minimum wage bill, Minimum wage increase: results may surprise, David Clark stated:

But the relationship between minimum wage and unemployment is not clear cut. Let me give an example. Over nine years between 1990 and 1999, the National government increased the minimum wage by a total of just 70c.

Unemployment soared. By contrast, when Labour increased the minimum wage $5 over the following nine years, unemployment plummeted to the lowest levels in the OECD.

He’s right, the relationship is not clear cut, despite his attempt to suggest there’s a link favourable to his bill. I think unemployment rates tend to reflect international economic conditions.

But Clark’s claim on 1990’s unemployment rates has been disputed on the ODT website:

Fiction or fact?

Submitted by photonz on Wed, 22/08/2012 – 9:53am.

David Clark says “Over nine years between 1990 and 1999, the National government increased the minimum wage by a total of just 70c. Unemployment soared.”

Unemployment over the decade went from 7.2% at the start of 1990 and finished at 7.3%at the end of 1999.

Clark made the same claim on his Facebook page so I asked him about it there:

That’s a poor, dismissive response.

I searched for unemployment statistics and found this:

That seems to refelct what ‘photonz’ claimed in the ODT.

Clark is partly right, unemployment did ‘soar’ in the nineties, but it also came down even more, so his claim is nonsense. The rate tyhen rose a little but was then trending down again when National lost the election in November 1999.

And the rise in unemployment in 1990 was well under way when Labour were in government, having gone from 7.3 in January 1990 to 8.1 in November, continuing to rise to 11.2 in October 1991. The ‘soaring’ began under Labour.

Sloppy or deliberate deceitful?

Clark’s claim that “Over nine years between 1990 and 1999, the National government increased the minimum wage by a total of just 70c. Unemployment soared.” is not supported by facts.

This looks like either very sloppy cherry picking of small trends and applying them to larger time periods – crude political point scoring?

Or deliberate misuse of statistics.

I’ll ask Clark to explain – it’s possible he has some other statistics which measure unemployment differently.

UPDATE:

David has responded on Facebook, he doesn’t dispute those statistics. Incredibly, he claims they support his view:

David Clark for Dunedin North Pete when unemployment ranges between 6 & 11% despite stingy minimum wage increases, and it then drops when more significant minimum wage increases are introduced, I think that pretty clearly illustrates my point.

What the data shows is that during a time of “stingy minimum wage increases” unemployment DROPPED from 11% to just over 6%. I don’t see how that illustrates his point.

I doubt David is deliberately cherry picking data to fit his argument, it looks more like he just thinks the data says what he wants it to say.

It’s amazing hat for one of Labour’s main election policies their supportng research is still so shallow and flaky.

David Clark: more (or less) on the minimum wage

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.

Union-speak.

  • 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.

More union-speak.

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.

Labour embarrass David Clark

David Clark, Dunedin North MP, has his first big interview today on Q+A. He generally responded to questions with well rehearsed phrases. Except two questions. After questions about the $15 per hour minimum wage (Q+A transcript):

SHANE           So how much will it cost employers?
 
DAVID            What will it cost employers? Well, it depends who you are as an employer. Most employers and most small and medium businesses pay their employees more than the minimum wage. They understand-
 
SHANE           So the overall cost?
 
DAVID            Well, we don’t know exactly how much it will cost. Um, we understand-
 
SHANE           You haven’t costed it?
 
DAVID            I haven’t costed it myself. I understand there has been work done around it.
 
SHANE           So Labour’s criticism and attacks on John Key last week over the bonus shares scheme about him not costing it, it sounds a bit hypocritical

And then on Mondayising Waitangi and Anzac Days:

SHANE           And how much is this going to cost? Have you costed this policy?
 
DAVID            The government says that it will cost 13 cents per worker, per day.
 
SHANE           No, has Labour costed this?
 
DAVID            I’ve seen all of their costs, and I’ve done my own calculations on it which suggests it will be considerably less than that. It may even have a net positive effect, and that’s because you get a boost to domestic tourism, you also get more productive workers from having rests. But anyway, even if it costs 13 cents per worker, per day, as the government estimates – and the government officials acknowledge themselves it’s likely to be overestimated – we don’t think that’s too much to pay to make sure people get to spend times with their families. Hard-working Kiwis deserve all the public holidays they get.

Clark followed up the interview with a press release:

$15 minimum wage a winner for workers – Clark

That is full of carefully crafted phrases, but no costings. The Herald report on the interview and aren’t flattering:

Labour MP clueless on minimum wage price tag

Labour MP David Clark has admitted he doesn’t know how much it will cost employers if the minimum wage is raised to $15 an hour, despite sponsoring a bill to do just that.

Raising the minimum wage to $15 an hour was a start to fixing some of the problems, he said.

But he admitted the cost to employers had not yet been calculated.

When asked what the overall cost would be, he said Labour did not know exactly how much it would cost.

He then admitted he had not costed it, but understood there had “been work done around it”.

“I think that we’ve seen that the millions of the dollars that it will put into the economy of raising the minimum wage will actually have a positive boost, it will have an economic advantage. So we’re not talking about costs here. We’re talking about boosting the economy,” he said.

Shades of Phil Goff’s election campaign embarrassment with “show me the money”.

Clark is a first term MP, have to cut him some slack. But he has work experience at Treasury, and is Labour’s shadow spokesperson for Revenue. He should be able to manage some numbers.

He’ll have to take this on the chin and hopefully learn from it. But it’s symptomatic of a much bigger problem. A Labour problem.

Labour selected Clark as candidate for a safe Labour seat, everyone expected he only needed to turn up to win Dunedin North after Pete Hodgson’s retirement.

I campaigned against Clark. He repeated carefully learnt lines at every meeting. He was elected. In Labour’s ledership contest after the election I heard David Parker recite some of the exact same lines Clark had been using.

Eight months later, on Q+A this morning and in his press release, Clark is still repeating the same lines. What’s going on going on here? He’s been an MP now for more than half a year.

It’s not entirely Clark’s fault. He seems to be doing what’s been asked of him by his party. He’s a reliable repeater.

And Labour are still running their election campaign. They put a lot into opposing asset sales during the campaign, it was their main election focus. They are still campaigning against asset sales. They are promoting anti asset sale petition. Labour MPs still use No Asset Sales avatars in social media.

And at the same time Clark’s minimum wage bill was drawn from the ballot Clayton Cosgrove had his anti asset sale bill drawn. That bill is designed to fail, it’s simply another campaign continuation.

Clark was lucky having his Monday-ising bill drawn from the ballot several months ago. He was lucky it got automatic support from Peter Dunne as it fitted with United Future policy.

Clark was lucky having his minimum wage bill drawn from the ballot this week.

Clark was unlucky that Labour handed him a lemon bill without checking the juice.

Labour selected Clark, they have groomed him as a faithful reciter, they helped him with Member’s bills.

And I guess they submitted the $15 bill to the ballot in the hope that it could be used as a campaign extension.

But campaign slogans won’t get this bill through. It would probably have been doomed anyway, adding costs to government and to employers in the current economic climate would have been rejected.

That doesn’t save the pile embarrassment Labour have dumped Clark in. Even if they do some number work and ‘show the house the money’ when this bill has it’s first reading it will be a dry lemon by then.

I don’t know if Labour are still campaigning from last year, or if they are early campaigning for 2014. But if they want to present themselves as a credible new government then I hope they’ve put a bit less time and resources into futile campaigning and a lot more effort into the basics.

David, your party has let you down here. Lesson learnt. It’s time you ditched Dr Slogan and started thinking and speaking for yourself.