Because it had to be in line with the annual inflation rate.
If you look at the minimum wage in the isolation of one year, yes that’s an easy trap to fall into.
But you have to look at the minimum wage over the duration of the last six years of this Government.
It has gone from $15.75 to $22.70.
That’s a $7 increase in six years. That’s 44 percent.
Hands up, who else got a 44 percent pay rise in the last six years?
A study by Motu Research a couple of years ago found most of the workers on the minimum wage are teenagers, who are more likely to live at home with their parents rather than be household breadwinners.
So it’s hard to argue that those kids, who have already been given a hefty pay bump over the last few years actually need to be kept in line with inflation.
Because, arguably they’re already ahead of inflation.
They now have more in the hand at the end of a 40 hour week than a first year teacher with a student loan.
Can you justify that? No.
So now, what we have is reportedly one of the highest minimum wage rates in the world in an economy that has among the lowest productivity in the developed world.
This doesn’t make sense.
It doesn’t make sense to keep bumping up the pay of teenagers so they’ve got heaps to blow on new sneakers.
While making it harder for their employers, who might be parents running a small business, to square the books.
Heather du Plessis-Allan is a journalist and commentator who hosts Newstalk ZB's Drive show.
7 comments:
It is idiocy indexing everything to everything else. How do mps agree to such folly laws? It makes it near impossible to crush inflation. Countries suffer reversals and citizens need carry much of, but we strive to shift the burden to savers and those with good jobs who fall far when they lose them. It is litle wonder property is so sought after. With conventional savings constantly eroded at a vast rate, too much money chasing fickle shares, property and gold are the only sure bets. The latter is too complex for the avergaqe citizen to dabble in, and capital gains are taxed. The notion that we should be a high real wage country is nonsense. We have many unwilling to work, and as obvious from school results, amny are not highly able, we do not match the IQ or industry of Asia, and much effort is now devoted to non productive matters maori related, and we are far from markets..
There are 60,381 civil servants in New Zealand with an average salary of $90,800, which gives an annual wage bill of $5,482,594,800. How many of those employees could be classed as productive? How many produce results worth $1,730 per week?
There are 120 mps in Parliament with an average salary of upwards of $170,000 for an annual cost of upwards of $20,400,000. Now those figures give an idea of the level of productivity in the civil sector. $3,269 per week to produce an economic crisis, apartheid, waste billions of dollars on imaginary climate change and experimental drugs.
A reduction in the restrictive regulations in this country should see a reduction of civil servants to enforce them, and allow those employed in the productive sectors to get on with their jobs without the cost of supporting all the regulators.
Less government and more freedom and opportunity to earn a living without red tape.
Well said Heather and Robert.
If NZ was a liquid it would be a whirlpool circling a drain at the moment. Someone should put the plug back into the plughole. Who will save us? Are we willing to help? I think a crunch is coming or a battle maybe.
MC
Matthew Hooton (NZH) recently commented that in the 2023 elections, ACT would be ready to form a minority government if it gets enough seats ( via the party vote).
This time, ACT will not automatically accommodate or support National and its confused or equivocal policies. A significant stance.
Whilst the high minimum wage issue is a recent phenomenon, the low productivity issue has been with us for decades. This is my view from the perspective of a retired consultant engineer who has worked in these industries:
The reason we have a low productivity is because we make low value-added products. There's nothing wrong with our work ethic or talent.
In each of our major industries; dairy, timber and meat we've gone the cheap & short-term route. In dairy we largely make milk powder and sell it in bulk as a commodity. In timber we grow the cheapest, nastiest wood and sell it as logs. In the meat industry there is a long history of malinvestment and destructive anticompetitive practices that has finally led to a major processor being bought for pennies by the Chinese. Let's hope they can do better!
Why is this?
> Farmer controlling cooperatives cannot see beyond the farm gate and so are reluctant to invest in process plant and product development that will add value.
> As Peter Jackson said, "New Zealand is always a day late and a dollar short" and this is particularly true in the timber industry where we should have been planting valuable hardwoods in the less accessible back blocks decades ago instead of radiata pine.
> It's just too hard to get new process plant construction through the RMA. This Act has been costing us growth for decades and is making us poorer by the day.
> NZ has mineral resources that it refuses to mine because the average Kiwi has been indoctrinated into thinking "mines are bad". Hypocritically though we're perfectly happy to buy products that use these same minerals mined elsewhere. Mines produce valuable exports, high wage jobs and develop technical capability.
> This is out of my areas of expertise, but do we offer sufficient tax incentives to encourage fixed capital investment?
Andrew Osborn
Being fair minded and a forester to boot in response to Andrew Osborne, I am interested in your comments on the cheap nasty wood we grow. I thought we had a wood processing industry here in NZ based on radiata pine that supplies the majority of our building timbers. Interested also in what alternative and valuable hardwood species you would rather see us planting. We somehow need to access this knowledge to boost the productivity and economics of our forestry sector.
Hi John
I am no forester, but my understanding is that we plant radiata because it has the shortest growing cycle, but it is very porous so requires chemical pressure treatment to make it last. In the US the absolute minimum they can use for framing is Douglas Fir but mostly they will use Ash, Beech, Cherry, Chestnut, Hickory, Maple or Oak. Compared to these, radiata is indeed cheap & nasty.
In the late 90's the CRI I was working for undertook a 4-year study of NZ timber industry economics and it recommended that radiata was planted near the mills but further away where transport costs were prohibitive it would pay to plant higher value species in order to maintain margins. The higher value covered the additional transport cost and the longer growing time meant less frequent trips to harvest.
Which species? Well, this was all researched by Forest Research decades ago, so I suggest you dig up their report.
The big picture here is that we have a massive monoculture in our commercial forests. Not just the same species but genetic clones! It is just a matter of time before a bug gets into the country and goes through our forests like a wildfire.
Like I said, forestry is typical of our primary sector - too focused on short term cash flow and undercapitalized.
Cheers
Andrew
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