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Saturday, November 12, 2011

John Key lying about minimum wage

Well, well, well, what do we have here...

Key 'sat on wage report'
Labour leader Phil Goff has accused Prime Minister John Key of "sitting on" a Treasury report that indicates a higher minimum wage does not cost jobs.

National and Labour have been locked in a war of words over lifting the minimum wage. If elected Labour would take it to $15 a hour. Key says that will lead to higher unemployment.

Goff has unearthed a Treasury report from March last year which he says debunks Key's argument.

It says: "We have evidence that has not been true in the past, so without new evidence the balance of probabilities is that a higher minimum wage does not generally lead to higher unemployment."

Goff said: "John Key has known this for 18 months. But that has not stopped him repeatedly telling New Zealanders that Labour's plan to lift the rate to $15 an hour in its first year in government would cost jobs. He based this on a report from the Department of Labour."

It was "outrageous" that Key has "sat on this advice all this time and tried to fool people by talking only about one report," Goff added.

Key has said that a $15 a hour wage will cost 6000 jobs, basing this on a Department of Labour review from last year.

The review states that "employment growth" - or new jobs - may be reduced by 4100 to 5890.

However, the report also notes that overseas research suggests minimum wages may have "no effect" on employment or that the effects may be 'too difficult to detect."

The right wing and the bore of Babylon, David Farrar have done all they can to justify paying workers less and are now even promoting sweatshop wages for youth so news that Treasury actually have no evidence of the supposed 6000 job loss by raising the minimum wage $2 should lead the mainstream media if the mainstream media weren't so focused on getting National elected.

When you compare the tax cuts have put $1000 extra per week into the pockets of the 700 millionaires NZ has, a $2 rise in the minimum age is chump change. Seeing as this Government bleat about 'catching up with Australia' all the time, why can't we catch up with their minimum wage, surely one way to keep NZers here would be to match the Australian minimum wage and in terms of economic impact, minimum wage gets spent directly into the community where its earned, unlike all this money handed over to the rich who tend to hoard it like dragons.

Don't tell me we can't afford it, this Government was borrowing $120 million per week for your tax cuts, if we can do that we can pay the 300 000 NZers working on the minimum wage a decent hourly amount to offset the rising cost of living. The poor didn't crash the global economy, no bloke in West Auckland working for $13 per hour was speculating on the Wall St stock exchange, yet they are forced to bear the brunt of an economic recession they had no hand in making.

National hid the advice that raising the minimum wage wouldn't have the terrible impacts they pretend it will, sleepy hobbits reap what they sow.



At 12/11/11 2:20 pm, Blogger Jd said...

This comment has been removed by the author.

At 12/11/11 2:21 pm, Blogger Jd said...


At 12/11/11 4:00 pm, Blogger Eric Crampton said...


With respect, the email Gower cites has no bearing on anything relating to the DoL's estimates of job losses with a $15/hr minimum wage. Regardless of your own views on the minimum wage, it is deceptive for Gower to have so-characterized things.

The email from one analyst at Treasury said that the increase in the youth minimum wage in the early 2000s had no effect on youth unemployment through the mid-2000s, so we ought not jump to assume that current youth unemployment rates are caused by the 2008 changes to the youth minimum wage.

Treasury opposed a $0.25 increase in the overall minimum wage in 2010, saying that it would kill jobs in a bad economy. It's in the RIS and the Cabinet Papers for that increase.

Whatever your personal position on minimum wages, it's just wrong to characterize Treasury as supporting a $15 minimum wage on the basis of this email.

At 12/11/11 4:02 pm, Blogger Eric Crampton said...

Further, if your position is that the burden of increasing the pay packets of poor working Kiwis ought fall on the 700 millionaires, you would better achieve your objective by arguing for an increase in the top marginal rate and wage subsidies to poorer workers. It's a less inefficient way of achieving the end you seek, and the burden is more equitably borne.


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