In line or out of line?
October 19th, 2011 at 9:05 am by David FarrarDanya Levy at Stuff reports:
Labour says its plans to overhaul employment laws will bring New Zealand in line with other developed countries and claims it is a return to 1970s-style industrial relations are scaremongering.
No scaremongering at all. But let us look at the claims it will bring NZ in line with other developed countries.
Take the 90 day probation period. We are almost the only country in the OECD that didn’t have one. Australia has 90 days, Canada 6 months, UK 12 months and Ireland 12 months. Germany is 6 months. The only OECD country without a legal probationary period is Denmark. So don’t believe the crap that this brings us in line with other countries.
Now take the plan to price more people out of the workforce by making it illegal for an employee to work for less than $15 an hour, even an unskilled 16 year old. Wikipedia has a list of minimum wages by country and what percentage they are of GDP/capita. This allows a comparison. Under Labour’s policy NZ would go from 62% to 72%. Here’s other OECD countries:
- Australia 52%
- Austria 37%
- Belgium 53%
- Canada 44%
- Denmark 66%
- France 53%
- Ireland 49%
- Netherlands 48%
- Switzerland 38%
- UK 66%
- US 33%
So again not bringing us in line with other OECD countries, but in fact increasing the gap between us and other OECD countries.
Related posts:
- International Alcohol Purchase Ages
- No mass opt out for 90 day law
- Countries with trial period laws
- Criminal age of responsibility
October 19th, 2011 at 9:29 am
David, Excellent!
Vote:You have given classic examples of the BS reporting that is now the norm for the “graduate reporters” that frequent, cyber, print and airwaves in 2011.
And then there is the Hobbit. Good Lord, Labour and their followers are clearly deparate.
October 19th, 2011 at 9:31 am
What about all the other aspects of it? Or does it suit your position to completely ignore the bits you cannot explain?
Vote:October 19th, 2011 at 9:32 am
One would think Labour would now start doing some homework on things before blurting them out. Not unlike the brochure Whale has.
Vote:I truely beleive Labour simply pick a team members bum and pull a random idea from it.
October 19th, 2011 at 9:46 am
So Labour has a policy to force employers to raise wages without any rise in productivity causing less jobs and higher inflation.
Vote:Labour is confirmed as a Party of Hobbit haters.
Labour wants taxpayers to pay for unions to work for the Labour party.
Labour wants uniform pay and conditions from Auckland to Bluff irrespective of ability.
Labour wants to try to win votes with collective control by unions.
October 19th, 2011 at 9:52 am
So DPF decides to compare the minimum wage between countries by some ratio of ‘GDP per capita’. I got to hand it to you DPF you’ll always find a way to spin things to make your argument look good.
Any normal person would compare the minimum wage in straight dollar terms taking the rate of exchange into account but I guess once you do that it makes our minimum wage look pretty low.
Vote:October 19th, 2011 at 10:03 am
Minimum wage laws are theft without the guts to be honest about it. Stealing is wrong.
Vote:October 19th, 2011 at 10:05 am
Yep, we should be getting in line with the OECD countries. I seem to recall most of them have a Capital Gains Tax.
Vote:October 19th, 2011 at 10:10 am
Here’s a possible campaign slogan:
Fuck New Zealand. Vote Labour.
Vote:October 19th, 2011 at 10:14 am
YesWeDid – No. The harm of a minimum wage is the proportion of the population who will be caught by it. The ratio of minimum wage to GDP is a reasonable proxy for that. Absolute wages is less reliable because wages vary very substantially across countries. A minimum wage of $x is going to do less damage in the US where income per capita is double that of NZ.
Vote:October 19th, 2011 at 10:14 am
Ben – Or how about this one? Better the Devil you know. Vote National.
Vote:October 19th, 2011 at 10:16 am
YesWeDid: or relation between minimum wage and median wage, maybe?
dpf: so is the proposed semi-award system “in line” or “out of line” with other countries? Yesterday you say that award systems somehow cause strikes (???), today you ignore it completely when comparing Labour’s proposed policy to existing policy in other countries.
[DPF: The data on countries with national awards is not as easy to compile or find, which is why I did not reference it. The probation period and minimum wage stuff was quick to locate]
Vote:October 19th, 2011 at 10:17 am
Personally I think a flat minimum wage for all is not a great idea, though I hardly think the sky would fall in if it were introduced, claiming so makes the right no better than the left that claimed the sky would fall in over 90 day probationary periods.
Vote:Using crap comparisons to GDP per capita and OECD rankings makes this argument a joke. How about concentrating on some constructive criticism.
A minimum $15.00 with an unskilled youth rate of $13.50 is a good place to start.
October 19th, 2011 at 10:21 am
@awb
“I seem to recall most of them have a Capital Gains Tax.”
You mean we don’t pay any tax over capital gains?
Vote:Or you mean we haven’t got a tax CALLED “capital gains tax”?
October 19th, 2011 at 10:27 am
DPF.
It would also be worthwhile to investigate which OECD countries have Youth Rates of pay.
I know for a fact that Australia does. In Fact, a person under 16 can legally be paid 60% of the minimum wage over there.
Vote:October 19th, 2011 at 10:30 am
@m@tt
“A minimum $15.00 with an unskilled youth rate of $13.50 is a good place to start.”
I don’t know about ‘good’ but it is a start….
What is going to happen with all those employees that are currently getting $15 and $13.50 are they going to see an increase as well? And those above that…..?
What is going to happen with all the buinesses who cannot affort another wage rise?
How is that going to reflect in the cost of services and goods?
What about inflation?
What is going to happen with the price of our export products? Will we still be able to sell them?
So many questions…..
Vote:October 19th, 2011 at 10:50 am
The opposition to a decent wage from the Right is bound up with their love of subsidy for themselves and their mates.
rather than paying a decent wage, they’re happy to see wages “topped up’ (subsidised) by the social welfare net.
This allows them a double free pass – they increase their profits while sucking on the public teat AND they get to whinge about how high the social security bill is.
When will it sink through their neanderthal skulls that paying higher wages gives people more to spend on goods and services?
Vote:October 19th, 2011 at 10:52 am
BTW, how’s that closing the wage gap with Australia promise going?
Vote:October 19th, 2011 at 10:57 am
MNIJ conveniently omits to connect the loop – ‘themselves and their mates’ in fact pay the bulk of taxes that fund the social welfare spend. But there you go ……
Vote:October 19th, 2011 at 11:00 am
The three E’s of minimum wage laws: Ethics, Economics and Emotion.
http://blog.mises.org/3473/the-economics-and-emotions-of-the-minimum-wage/
Vote:October 19th, 2011 at 11:03 am
A probationary period law existed prior to the 90 day law and still exists in fact although it is no longer used because well why would you with a 90 day period available. The question is not whether there is the ability to have probationary periods it is whether a system whereby employers can fire you without notice or reasons on the spot is an acceptable probationary period and I would be interested to see what countries you can find that have that as their policy.
I am interested to know why there are suddenly only 12 countries in the OECD but that might be for presentation rather than a need to make ours appear high. The problem you see is that GDP per capita is a pretty useless thing to measure our minimum wage against. What matters with a minimum wage is whether it is able to cover basic living costs, in the USA it is far below which is well recognised. In NZ it is still to low and this is the reason we have Working For Families. Our wages are so low the Government actually has to subsidise families in order for them to be able to take care of themselves properly. This is the real reason wages need to rise. Not because they are a low proportion of GDP but because people cannot afford to take care of themselves properly and it is not acceptable to say an employer can pay employees below what they need to live.
Vote:October 19th, 2011 at 11:06 am
MyNameIsJack Says:
“When will it sink through their neanderthal skulls that paying higher wages gives people more to spend on goods and services?”
Now why did us ‘neanderthals’ not think of that?
Vote:MNIJ is so brainy.
We make the minimum wage $100 an hour.
Then we can spend heaps on goods and services and everybody will be happy.
MNIJ for PM!
October 19th, 2011 at 11:10 am
@ robcarr
No, the reason we have WFF is because Labour likes to bribe people with their own money to vote for them.
How is WFF funded? Through tax. Who pays tax? The people who get WFF.
So the state takes money off families, then gives a little bit back to some of them, and calls this “helping”.
And you think this makes sense?
And thats just the practical issue, what about the ethics involved? As a worker I own my labour. Who are you (or the state) to tell me what price I can sell my labour for?
Vote:October 19th, 2011 at 11:11 am
I am on a 90-day probationary period with my job. Going by my performance in the job so far I should survive it.
The only thing wrong with it is that you have no right of appeal, you have no right of defence. You are entirely at the employer’s whim.
Other than that – and I know it sounds contradictory – I support employers’ right to employ whom they wish, or not.
But they should not be given a legal licence to be unjust.
Vote:October 19th, 2011 at 11:13 am
Lee01 – You are missing the fundamental reason minimum wages exist, in the employee/employer relationship, all the power is enjoyed by the employer.
Vote:October 19th, 2011 at 11:17 am
@ awb
I disagree. Nobody is forcing me to apply for a particular job. I can decide if I like the employer or not. I can go elsewhere. I can upskill or train for a different job or a different career.
People are responsible for their lives and their choices. Employees are not powerless.
Moreover, the ethical issue remains: Minimum wage laws are effectively stealing from me, by forcing me to sell my labour (which I own) at a price I may not want to.
Theft is theft, no matter the emotive justification.
Vote:October 19th, 2011 at 11:25 am
‘I am interested to know why there are suddenly only 12 countries in the OECD but that might be for presentation rather than a need to make ours appear high.’
I think the reason DPF has picked those countries is they are roughly similar to New Zealand. Looking at the wikipedia page he mentions the ratio is all over the place and hard to see how it really has much meaning.
Of course cherry picking data to suit an argument is not something DPF would do especially after that whole ‘Spirit Level’ thing.
[DPF: Ha the ones I left out generally have no minimum wage or the percentage is really really low so helps argument more. Feel free to compile the full list of OECD countries and send it to me for blogging]
Vote:October 19th, 2011 at 11:27 am
@MNIJ
There is this little old thing called competition, and it’s international.
If your products are too expensive no one will buy them.
If you don’t sell your products you go broke.
Taxes decline and social welfare goes to hell in handcart.
So what part of these principles are you waving your magic wand over to prevent?
Vote:October 19th, 2011 at 11:29 am
Lee01 – How is it stealing from you? Do you want to sell your labour for less than minimum wage? Or if its more, you are always free to negotiate a pay rise if your work merits it.
And correction, some employees are not powerless. Some have the skills and means to upskill or retrain, or even just quit. Not everyone enjoys this freedom. The minimum wage law exists to protect those who are most vulnerable, for everyone else its a non-issue.
Vote:October 19th, 2011 at 11:34 am
m@tt says:- “A minimum $15.00 with an unskilled youth rate of $13.50 is a good place to start.”
I don’t agree matt. The only way to be fair to employers is to allow labour market demand to dictate what people are worth, otherwise we’ll just be out competed on a cost competitive basis.
Works both ways when labour demand is high. I suggest Labour find a more realistic and effective way to redress the imbalance in the distribution of wealth (which I acknowledge is a problem).
Vote:October 19th, 2011 at 11:36 am
I want to sell it for whatever I want to sell it. It’s mine. So it is stealing because it takes something I own (my labour) without my consent.
Yes, they do. The problem is that decades of nanny statism, easy welfare and lax morals has turn many into sheeple who are always dependent on nanny state.
By stealing off everyone?
Your not protecting people who are vulnerable, your making everyone vulnerable to a criminal and greedy state.
Vote:October 19th, 2011 at 11:44 am
Gosh Lee01, your not just a religious nutter your a libertarian religious nutter. Surviving in our world of lax morals and nanny statism must be a daily grind for you, I don’t know how you cope.
Vote:October 19th, 2011 at 11:46 am
In the late 1990s I was working in a Labour-voting, Tory-hating, ex-mining, low socio-economic area of North East UK, where a large number of people were on minimum wage – or just over. When the Labour government raised the minimum wage there was wailing amongst the workers: they knew the effect it would have on their low-margin economy (and well remembered the devastation to the communities when the pits closed.) Sure enough, within a few months a number of local businesses went under, unemployment rose, living costs went up and everyone was worse off. A real blow to the people who had a drive to work & improve themselves. Still, the benefit was good (they had more disposable income than I did, as a young professional), so no harm done, right? Is this really the way to run a society?
Vote:October 19th, 2011 at 11:52 am
YWD,
ah the usual intellectual approach of the liberal-left: When faced with an argument you cannot refute, resort to ad hominem.
Vote:October 19th, 2011 at 11:54 am
To all you minimum wage haters – the cost of labour is one thing that drives businesses to improve productivity by investing in plant and equipment, something that New Zealand has been very poor at.
Vote:October 19th, 2011 at 12:01 pm
Wage rates are a function of the value they contribute to the profitability of a company (since it is in the private sector that wealth is generated – public sector salaries are paid from the taxation on private companies, their employees PAYE and the GST on spending). The GDP comparison is extremely valid because labour is mobile especially in the case of Australia. Many NZers can move to the UK through ancestral connections and the Commonwealth connection makes it a little easier to work in Canada so the average hourly rate per GDP affords an even comparison demonstrating the relative wealth of the economies most like ours AND, more importantly, where our skilled labour can and does migrate to.
Wage rates are also a function of productivity and the most recent NZIER study into the reasons for the differential between Australian and NZ incomes puts 77% of the differential not down to the mineral wealth of Australia but to Australia’s more superior productivity record and its higher quality of management. A big reason why management quality is higher in Australia is because we lose a percentage of our brightest and best managers to Australia and Australian companies get to profit from those skills and that higher profitability makes it possible to afford higher wages.
You cannot legislatively close a wage gap. To force employers to pay an artificial premium for labour because of a populist appeal to working/middle class votes (essentially the reason for Labour’s policy) will price new employment, especialy for new and small businesses, out of the marketplace which in turn affects the rate of unemployment. The big high tax economies of continental Europe have built in structurally higher unemployment because they make the cost of labour too high (all the union and government mandated benefits and perks) and they make the risk of making a mistake with a new hire too costly so they only take on new saff when they absolutely have to. The reason why unemployment in the US remains so intractably high is not just because comsumer demand is so low and reduced household wealth due to the stock and property market declines but because the threat of new and higher taxes, the uncertainty of the cost of employer paid healthcare (and important part of the employment equation here) and the unknown and unquantifiable risk of new regulatory burdens from the various new Obamacare and Dodds-Franks regulatory agencies and the aggressive overreach of existing Federal agencies (such as the EPA- Clean Air Act and the Dept of the Interior-Endangered Species Act), makes it easier and less risky to get greater productivity out of your existing workforce.
We’ve seen the impact of the raising of the youth minimum wage and its impact on youth unemployment (both here and in NZ). It is clear that the 90 day probation period has resulted in more hiring and negligible abuse. Labour proposes to shoot itself in both feet with this policy. By paying off its union mates, it ensconces already employed union members at the expense of the young and the unemployed who will incrementally be more shut out from the workforce by these policies.
Vote:October 19th, 2011 at 12:06 pm
@YWD
What a crock of shit
So business goes from struggling to unprofitable due to international competition after it has higher wages forced on it.
The answer, according to you, is to borrow more for improved machinery (even if some Bank is dumb enough to lend it to an unprofitable business) and now all will be transformed as if by a magic wand.
Like they wouldn’t have done that before the crippling wage rise?
This is cloud cuckoo land stuff.
Vote:October 19th, 2011 at 12:13 pm
@Lee01 I think WFF makes a lot of sense in our current economic climate to help struggling families get by.
Ff you want to sell your labour under the minimum wage there really is very little stopping you. The state can only enforce the right to higher pay if the employee makes a formal complaint to the Department of Labour. It is the employer who carries all the liability for minimum wage laws not employees.
If the employee does make a complaint to the Department of Labour the maximum penalty is $5000 plus lost wages.
If an employee came to a genuine agreement with their employer to pay less than the minimum wage it is likely the only penalty given would be the lost wages.
Vote:October 19th, 2011 at 12:48 pm
MNIJ has obviously never managed or owned a business.
There was a very good interview in the Dom Post recently with a former Labour MP ( Mr Peck –sorry I have forgotten his christian name ). He and his wife now own and run a coffee/ lunch bar in Wellington. He clearly explained why he doesn’t agree with a general increase in a minimum wage. He also welcomed any of his former Labour mates down for a coffee to explain the “facts of life” of running a small business.
Vote:October 19th, 2011 at 1:04 pm
TripeWryter 11.11am
Vote:If, after going to the expense and taking the (considerable in your case) risk of employing you,
you turn out to be a useless article and not capable of performing or producing anything of value
for the employer. And it transpires that your only real skill was to talk up a storm to get the trial,
you are let go, how is that unfair? and to whom ?
October 19th, 2011 at 1:04 pm
On the Left:
There will always be demands from a big section of society for a ‘living’ minimum wage (at whatever level society agrees) and it’s to be expected in any compassionate society.
On the Right:
The higher a minimum wage the greater the distortion on the free operation of the labour market and it won’t necessarily always achieve it’s intended effects of a better living income- reduced willingness to hire, abuse of exemptions like contract rates, reduced hours of work etc.
Unless…
Under Gareth Morgan’s Big Kahuna proposal the guaranteed minimum income would achieve directly what we are distorting the labour market with a high minimum wage to try and do indirectly – so there would be no need for a minimum wage. People would have a better shot at a living income regardless of circumstances (but incentives to work are still strong) and the labour market would be operating far more efficiently.
Just putting it out there…
Vote:October 19th, 2011 at 2:07 pm
Just found the other OECD countries stats and filled in some holes. It seems the average is 44% of GDP for OECD Nations DPF if you are set on using that measure.
I prefer one that takes into account the actual value of the minimum wage paid. Minimum-wage.org converts minimum wage rates around the world to international dollars. From this the countries you listed have respective minimum wage rates of:
Australia $20
Austria $14
Belgium $18
Canada $16
Denmark $44
France $17
Ireland $18
Netherlands $19
Switzerland $15
UK $22
US $15
New Zealand’s would be $16 putting 3 countries below us and 7 above. A $2 increase would put us to $18.50 in international dollars putting 4 countries above us and 7 below assuming no one else increases their minimum wage. Thus we would go from slightly below average to slightly above assuming no one else improves their rates.
However this doesn’t take into account industry standard systems which push up wages and those apply in the majority of OECD nations. You can view all the European systems of employment standards here: http://www.epsu.org/r/463. In Austria for example there is 98% collective bargain coverage and the ability to have extension orders so there could well be no person being paid the listed minimum wage. The industry standards Labour is proposing are weaker than they would be in Europe/Australia and wouldn’t be fully implemented for several years so there would be some catchup time.
Vote:October 19th, 2011 at 2:53 pm
robcarr
Interesting post. Had a look at http://www.minimum-wage.org/history.asp Rather pro union, but nothing is apolitical these days.
Interesting piece of history on the site:
-”Early attempts by labor unions to create a mandatory minimum wage were ruled unconstitutional by the U.S. Supreme Court on the grounds that they “restricted the worker’s right to set the price for his own labor”. ”
-”After winning the historical 1936 election by a landslide, President Roosevelt signed the Fair Labor Standards Act (FLSA) into law in early 1938.”
Surprising that the minimum wage in the States hasn’t been subsequently challenged on the basis of unconstitutionality.
Vote:October 19th, 2011 at 3:02 pm
Roosevelt was a fool. His economic policies prolonged the depression for at least ten years longer than need be. The scary thing is that Hitler had more economic sense.
http://video.google.com/videoplay?docid=3661751598047758844#
Vote:October 19th, 2011 at 3:11 pm
Lee01,
Minimum wage laws are theft without the guts to be honest about it. Stealing is wrong.
“If I own myself, then I own my labor. If I own my labor, then I have a right to exchange it for whatever compensation I agree to, on whatever terms I agree to. That’s my perspective as a worker. My perspective as an employer would be the same: if someone is willing to do work for me at a price I find agreeable, then it’s nobody else’s business to interfere with our exchange. This seems so straight-forward to me now that it takes a real effort to remember how I could ever have believed anything else.”
http://blog.mises.org/3473/the-economics-and-emotions-of-the-minimum-wage/
Property rights are not, and should not, be unfettered. If minimum wages are an unjust intrusion on freedom of trade then does the same principle apply to anti-competitive behaviour between large corporations? What about insider trading?
The value of having prices fluctuate in a free market is that the price is a means to send information between various parts of the economy in a way that is more efficienct and more accurate than a government bureaucracy. When the price of butter goes up an individual consumer can stand in the supermarket isle and think to themselves whether the increase in the cost of butter is worth it or whether butter will now be substituted for another product. This is a judgment that no bureaucrat could hope to make for every individual consumer.
But markets have their limits. A private monopoly for instance is neither efficient nor beneficial to society at large compared with competitive market conditions. One may argue that the owners of the monopoly earned their ownership fairly without breaking any rules and therefore they should be entitled to take advantage of such market conditions, however why should everyone else tolerate that when regulation against anti-competitive behaviour protects the public from inefficient monopolies while still allowing people to invest in companies and make a profit?
While I’m not generally a fan of minimum wages because they tend to price certain jobs out of the market, in the absence of a guaranteed minimum income I think they can be useful in ensuring that wealth is distributed across society enabling more people to participate in the economy and going some way to alleviate extreme poverty which creates its own problems such as crime, domestic abuse etc.
It has to be remembered that a lot of lowly paid jobs have to be done. An employer cannot simply decide to do away with cleaning for instance. However, if a minimum wage is too high you do lose the ability to distinguish certain jobs in price. For instance one job may be worth $13 while another is worth $15. A $15 minimum wage forces them to be exchanged at the same price leading to the inefficiency of giving the same incentive to do the less valued work as to do the higher valued work.
This could be overcome by creating a basic income for all and removing all price floors.
Vote:October 19th, 2011 at 3:14 pm
Yes, they should. Stealing is always wrong. The rest of your argument fails right there at the start on ethical grounds.
Financed how?
Vote:October 19th, 2011 at 3:23 pm
Scott Chris (2,257) Says:
October 19th, 2011 at 2:53 pm
Surprising that the minimum wage in the States hasn’t been subsequently challenged on the basis of unconstitutionality.
The US supreme court has in the past struck out minimum wage laws as being an unconstitutional infringement on liberty of contract.
See Adkins v. Children’s Hospital
http://en.wikipedia.org/wiki/Adkins_v._Children%27s_Hospital
This was overturned in West Coast Hotel Co. v. Parrish
http://en.wikipedia.org/wiki/West_Coast_Hotel_Co._v._Parrish
Bascially because the court kept rejecting Roosevelt’s New Deal legislation, such as minimum wages, they were threatened with what was essentially a court-packing bill which would raise the number of justices to 15, which would be appointed by Roosevelt and thus approve his legislation.
This was prevented by one of the justices doing an about-face thus undermining the need for Roosevelt’s court-packing bill.
http://en.wikipedia.org/wiki/The_switch_in_time_that_saved_nine
Vote:http://en.wikipedia.org/wiki/Four_Horsemen_%28Supreme_Court%29
October 19th, 2011 at 3:28 pm
Weihana
In the midst of the greatest recession since the Great Depression and the subsequent reductions in income and increase in poverty crime rates have gone down.
You say you’re not a fan of minimum wages but then suggest a “basic income for all”. What is that figure? Who decides? And most importantly who pays? The tax payer through ever more WFF or employers through a legislatively imposed minimum wage that you just said prices some jobs out of the market – as I explained at 12.01pm?
Vote:October 19th, 2011 at 3:52 pm
# Lee01 (1,497) Says:
October 19th, 2011 at 3:14 pm
Property rights are not, and should not, be unfettered.
Yes, they should. Stealing is always wrong. The rest of your argument fails right there at the start on ethical grounds.
In which case you have no problem with anti-competitive behaviour and insider trading? Meanwhile in a democracy the majority will not sacrifice themselves for some ideology and will regulate markets in a manner that is consistent with society’s overall best interests and not merely the interests of a select few at the expense of everyone else.
Note that’s not to say that a minimum wage is necessarily in the best interests of society overall.
This could be overcome by creating a basic income
Financed how?
Through taxation. It would be little different to what we have now except that we wouldn’t need as much bureaucracy to test whether people should get it. Probably the best way to do it would be through a negative income tax whereby anyone earning below a certain threshold would be entitled to receive money from the government rather than paying tax.
But at the same time I think it is important to remove all other benefits and price floors on wages.
Vote:October 19th, 2011 at 4:07 pm
I think we should just bite the bullet and make a “minimum salary” of $60,000 a year for everyone. No, scratch that, make it $100,000. A nice round number. Did someone say $200,000? DONE!
Vote:October 19th, 2011 at 4:07 pm
“Minimum-wage.org converts minimum wage rates around the world to international dollars.”
Of course, some of those countries are richer than us, and some (may be) poorer. The idea of ‘international dollars’ is way to spongy to use as a foundation for your argument.
Vote:October 19th, 2011 at 4:18 pm
Lol. Your not serious are you? Democracy is just legitimisation of theft and oppression. And who decides what a societies “overall best interests are”? You? People who think like you? And don’t say “society” because that is meaningless. You really learnt nothing from the 20th century did you?
If a majority of people on my street get together and vote to steal my property, does the fact that they voted to do so make it any less theft?
So more stealing then. You steal from one group, give it to another, and claim your “helping”.
The concept of right and wrong just never enters your mind does it? You see, your ideology is no different to fascism or communism. Your using your rejection of moral absolutes, and YOUR ideology of what the state should do, to legitimise economic slavery and mass theft and state oppression.
You can dress it up in all the bullshit about caring and sharing, but at the end of the day your ideology is that the state points guns at people, takes their property, and doles it out to others.
Its totalitarianism plain and simple. You can hide behind crap about it being in “societies best interests” but thats just you legitimation of totalitarian oppression.
Vote:October 19th, 2011 at 4:28 pm
# kiwi in america (1,484) Says:
October 19th, 2011 at 3:28 pm
Weihana
In the midst of the greatest recession since the Great Depression and the subsequent reductions in income and increase in poverty crime rates have gone down.
True, I don’t think one can expect crime to go up simply because the economy is down. But it is hard to dismiss the obvious association poverty has with crime though the relationship is perhaps not a simple one. In any case I can condede that it wasn’t a good argument on my part in the current context (i.e. as if a minimum wage will reduce crime).
You say you’re not a fan of minimum wages but then suggest a “basic income for all”. What is that figure? Who decides? And most importantly who pays? The tax payer through ever more WFF or employers through a legislatively imposed minimum wage that you just said prices some jobs out of the market – as I explained at 12.01pm?
Who decides? The government obviously, hopefully taking into account expert advice. Who would you expect?
A minimum wage is not a basic income as such, it is a price floor. “Basic income” is a form of welfare. We already provide welfare to those who can’t provide for themselves so little would change. Incentive to work would be provided by the fact that most people who work do so because they want to do something with their lives and also that any minimum standard of income would (or at least should) be at such a level that it would provide what people need but it would not provide all that people want.
The reality is that we don’t let people starve to death so how can we expect starvation to be a realistic incentive for people to work? People work for the reasons I just mentioned, they want to get ahead and they want more than the basic necessities of life. So given these two facts it would seem we are just wasting money by employing a large bureacracy to administer welfare payments depending on a rather complex set of criteria.
We could save money by reducing the bureacracy and we wouldn’t require much extra funds for such a scheme because we are already giving welfare to those who need it.
Vote:October 19th, 2011 at 4:33 pm
# transmogrifier (416) Says:
October 19th, 2011 at 4:07 pm
I think we should just bite the bullet and make a “minimum salary” of $60,000 a year for everyone. No, scratch that, make it $100,000. A nice round number. Did someone say $200,000? DONE!
Such absurd suggestions do not do justice to the idea of a basic income which has been proposed by a number of highly respected economists.
It’s like countering a person advocating a lower tax rate by suggesting we make it zero. The degree to which something is done often matters and can be the difference between a good and a bad idea.
Vote:October 19th, 2011 at 4:39 pm
By “highly respected” you mean people the Left likes.
Actually, his absurd suggestions make a good point. People like you pull numbers out of your ass to justify stealing other peoples property.
Vote:October 19th, 2011 at 4:54 pm
So Weihana you’re saying the the current system of making welfare payments to provide a minimum income (a system that I agree is ripe for reform) is bureaucratically inefficient so are you proposing a minimum wage increase (that you said you oppose) as the alternative?
Vote:October 19th, 2011 at 4:58 pm
# Lee01 (1,498) Says:
October 19th, 2011 at 4:18 pm
Meanwhile in a democracy the majority will not sacrifice themselves for some ideology and will regulate markets in a manner that is consistent with society’s overall best interests
Lol. Your not serious are you?
The contraction of “you are” is “you’re” not “your”.
Democracy is just legitimisation of theft and oppression. And who decides what a societies “overall best interests are”? You? People who think like you? And don’t say “society” because that is meaningless. You really learnt nothing from the 20th century did you?
If a majority of people on my street get together and vote to steal my property, does the fact that they voted to do so make it any less theft?
In a democracy the majority decides, obviously. But there is a difference between what is in the best interests of most people in actuality and what a majority of people believe is in their best interests. Belief can often be mistaken and this can be true of a majority of people as much as it can be of an individual. So no I’m not saying whatever the majority decides is okay, but I am saying that a majority of people have no rational basis to tolerate things which harm their interests such as anti-competitive behaviour or insider trading or a lack of employment regulation such as health and safety requirements.
Through taxation. It would be little different to what we have now except that we wouldn’t need as much bureaucracy to test whether people should get it.
So more stealing then. You steal from one group, give it to another, and claim your “helping”.
I suppose you want to scrap the universal pension then? That’s stealing by your definition. BTW, do you receive government super?
The concept of right and wrong just never enters your mind does it?
Not your concept of it, no.
You see, your ideology is no different to fascism or communism. Your using your rejection of moral absolutes, and YOUR ideology of what the state should do, to legitimise economic slavery and mass theft and state oppression.
Ensuring the needy don’t starve is “economic slavery” and “state oppression”? lol.
In actual fact what I propose is nothing like fascism or communism and I fail to see what either ideology has to do with a rejection of moral absolutes.
You can dress it up in all the bullshit about caring and sharing, but at the end of the day your ideology is that the state points guns at people, takes their property, and doles it out to others.
Yes, to an extent that is true. I can’t deny it. I am advocating that the government, through force, redistribute wealth.
Its totalitarianism plain and simple. You can hide behind crap about it being in “societies best interests” but thats just you legitimation of totalitarian oppression.
No, totalitarianism is “of or being a political system in which those in power have complete control and do not allow people freely to oppose them”
What I have proposed does not amount to that.
Vote:October 19th, 2011 at 5:02 pm
Lee01 (1,499) Says:
October 19th, 2011 at 4:39 pm
Such absurd suggestions do not do justice to the idea of a basic income which has been proposed by a number of highly respected economists.
By “highly respected” you mean people the Left likes.
Milton Friedman & Friedrich Hayek. People the left likes? If they’re lefties there must be precious few people on (what you consider) the right.
Vote:October 19th, 2011 at 5:05 pm
# kiwi in america (1,485) Says:
October 19th, 2011 at 4:54 pm
So Weihana you’re saying the the current system of making welfare payments to provide a minimum income (a system that I agree is ripe for reform) is bureaucratically inefficient so are you proposing a minimum wage increase (that you said you oppose) as the alternative?
No I haven’t proposed a minimum wage increase at all. I was simply responding to Lee01′s suggestion that minimum wages were theft and that it’s inherently unjust to regulate trade. I suggested a “basic income” as an alternative to the minimum wage.
Vote:October 19th, 2011 at 5:15 pm
Which is inherently problematic. Majoritarianism is just legitimisation of statist tyranny.
The problem with this is that the list of what is supposedly in our “interests” (always defined by other people of course) keeps expanding.
Its merely your opinion that a living wage, or minimum wage laws, are in my interests. Thats the problem. Your assuming your view of the role of the state is purely rational and in everyones interests. But, its JUST your opinion, and your opinion does not give you a right to steal.
Yes it is, and yes I do. I want to scrap ALL state social welfare.
No I don’t, though that would not be a legitimate argument even if I did. The fact is that under the present system I and others are taxed to provide for the states level of spending, and so most people are unable to provide for themselves. Give me my tax money back.
Not ANY concept of it. You have proven that repeatedly. Thats why you can justify everything from torturing babies to stealing. Your lack of any objective and absolute moral foundations makes anything potentially legitimate. You just dress it up in bs about “reason” and “societies interests”.
Its the MEANS your advocating, not the ends. Here is another basic moral/ethical maxim you do not seem to understand. The ends do not justify the means.
There are many voluntary means for ensuring the needy do not starve. Enslaving people to the state is not a legitimate means.
And your system IS a form of totalitarianism. It assumes that individuals do not exist for themselves, but for the state, and it legitimises any increase in the size, power and control of the state by claiming that “its in our interests”. That has always been the claim of totalitarians. Thats why I say it is little different to fascism and communism.
Now at least your getting somewhere. So you believe that it is right for one group of people to use force to steal from another group of people.
Think about that for a while before responding.
Vote:October 19th, 2011 at 5:19 pm
Try Murray N. Rothbard, Ludwig von Mises and Hans Hermann Hoppe instead.
http://mises.org/
Vote:October 19th, 2011 at 5:27 pm
Weihana
Vote:So define “a basic income” – how much? How is it delivered and answering “the government” is not an answer. You say a benefit is bureaucratic so what are you suggesting?
October 19th, 2011 at 5:34 pm
kiwi in america
Notwithstanding your points about the minimum wage and the ability of people to migrate to neighbouring economies, which seem fairly agreeable, I’m not sure I understand or agree with the following statements:
“Wage rates are a function of the value they contribute to the profitability of a company…”
Take two companies, one making a profit and one making a loss. The cleaners for both companies will be paid roughly the same. The profitability of the company is irrelevant, their remuneration will be a function of supply and demand for their particular type of labour.
“…since it is in the private sector that wealth is generated”
Not true. If the government builds a bridge it is still a bridge and it can be considered “wealth”. Perhaps what you are saying is that the money used to build the bridge was obtained from someone in the private sector. That doesn’t really make the bridge a privately built bridge though.
Vote:October 19th, 2011 at 5:52 pm
Weihana
Your example is fatuous – the company making a loss will go out of business unless it cuts its costs or boosts its revenue and its cleaners will all be out of a job. If company B is a small business and is making a marginal profit and barely paying its owner an income and certainly an income below what he/she could earn working for someone else, if they have a majority of their workers on the minimum wage and the government increases the minimum wage, the government has imposed by fiat a new cost on the business that comes straight out of the owner’s back pocket. The owner has three unpalatable choices – lay off some employees and try and get the others to work harder to lower the costs to maintain a living income, close up shop and lay off ALL the workers or live on an even lower income.
“If the government builds a bridge” – where the hell does the government get the money to build the bridge in the first place? It can’t just print money – even government loans have to be paid off as Greece is finding out the hard way. Who pays for the bridge or pays the loan payments for the money borrowed to build the bridge? The taxpayers!! Who are the tax payers – well the bulk of taxes are paid by …..private sector companies, the PAYE on the wages that private sector companies pay the people they employ and the GST on the consumption of workers and businesses. If more and more private sector companies that were profitable become less profitable or unprofitable guess what – the tax take goes down. Then the government has less money to pay for the things that we expect a government to fund: education, hospitals, roads and yes bridges etc etc.
Its not rocket science.
Vote:October 19th, 2011 at 5:58 pm
# Lee01 (1,501) Says:
October 19th, 2011 at 5:15 pm
Its merely your opinion that a living wage, or minimum wage laws, are in my interests. Thats the problem. Your assuming your view of the role of the state is purely rational and in everyones interests. But, its JUST your opinion, and your opinion does not give you a right to steal.
First, I’m not a supporter of the minimum wage as such, I support a basic income. And yes, it is my opinion that it’s a good idea. What is with people who think that countering with “that’s just your opinion” actually amounts to something that resembles an argument? Obviously whether or not I think it is justified presumes that my opinion is right. You can disagree and vote accordingly or retreat to Lee’s Gulch hidden away in the mountains with an invisible forcefield.
I suppose you want to scrap the universal pension then? That’s stealing by your definition.
Yes it is, and yes I do. I want to scrap ALL state social welfare.
That’s consistent so credit where credit is due.
BTW, do you receive government super?
No I don’t, though that would not be a legitimate argument even if I did. The fact is that under the present system I and others are taxed to provide for the states level of spending, and so most people are unable to provide for themselves. Give me my tax money back.
Actually people who receive super are receiving a lot more than they ever paid in tax taking into account all the other services they receive and have received.
Not your concept of it, no. (right and wrong)
Not ANY concept of it. You have proven that repeatedly. Thats why you can justify everything from torturing babies to stealing. Your lack of any objective and absolute moral foundations makes anything potentially legitimate. You just dress it up in bs about “reason” and “societies interests”.
I never justified torturing babies. You need to actually understand what I have written before criticizing it.
Here is another basic moral/ethical maxim you do not seem to understand. The ends do not justify the means.
I understand it, I just know that it’s wrong. Objectively it must be the ends that justify the means. A more agreeable statement would be that the ends do not justify ANY means because the means also represents ends as well. For instance taxation is not just a means it is also an end (i.e. it results in someone losing a portion of their income).
There are many voluntary means for ensuring the needy do not starve. Enslaving people to the state is not a legitimate means.
Paying tax for reasonable and justified government expenditures is not what I would consider “slavery”.
And your system IS a form of totalitarianism. It assumes that individuals do not exist for themselves, but for the state, and it legitimises any increase in the size, power and control of the state by claiming that “its in our interests”. That has always been the claim of totalitarians. Thats why I say it is little different to fascism and communism.
Not true. I exist for myself and part of that means recognizing that I don’t want to live in a society where people go without the things they need and where entrenched poverty leads to social and economic exclusion.
Yes, to an extent that is true. I can’t deny it. I am advocating that the government, through force, redistribute wealth.
Now at least your getting somewhere.
But you aren’t it seems. YOU ARE, not YOUR.
So you believe that it is right for one group of people to use force to steal from another group of people.
Think about that for a while before responding.
You are generalizing whereas I am advocating that only the state be permitted to do such a thing. And yes I do think it is right that the state takes that action, which includes taxation, in order to fund those government services which are necessary and which help create a free and prosperous society.
Vote:October 19th, 2011 at 6:08 pm
# kiwi in america (1,487) Says:
October 19th, 2011 at 5:52 pm
Weihana
Your example is fatuous – the company making a loss will go out of business unless it cuts its costs or boosts its revenue and its cleaners will all be out of a job. If company B is a small business and is making a marginal profit and barely paying its owner an income and certainly an income below what he/she could earn working for someone else, if they have a majority of their workers on the minimum wage and the government increases the minimum wage, the government has imposed by fiat a new cost on the business that comes straight out of the owner’s back pocket. The owner has three unpalatable choices – lay off some employees and try and get the others to work harder to lower the costs to maintain a living income, close up shop and lay off ALL the workers or live on an even lower income.
I understand that an artificial increase in wages can cause marginal businesses to go under. What I am objecting to is the assertion that wages are a function of the value they contribute to the profitability of the employing company. Wages are a function of supply and demand. Whether a company is making a big profit or a small profit or no profit at all, the wages of the workers are generally unaffected. If a company doubles its profits it will not pay its cleaners twice what was paid before.
“If the government builds a bridge” – where the hell does the government get the money to build the bridge in the first place? It can’t just print money – even government loans have to be paid off as Greece is finding out the hard way. Who pays for the bridge or pays the loan payments for the money borrowed to build the bridge? The taxpayers!! Who are the tax payers – well the bulk of taxes are paid by …..private sector companies, the PAYE on the wages that private sector companies pay the people they employ and the GST on the consumption of workers and businesses. If more and more private sector companies that were profitable become less profitable or unprofitable guess what – the tax take goes down. Then the government has less money to pay for the things that we expect a government to fund: education, hospitals, roads and yes bridges etc etc.
Its not rocket science.
True the money comes from individuals and private companies. But as I said, I don’t think that means the bridge was a privately built bridge or that it justifies the assertion that all wealth is created by the private sector.
Moreover, taking your assertion to its logical conclusion a communist country produces no wealth which is obviously not true. North Korea produces wealth, though much less than if it were a market economy.
Vote:October 19th, 2011 at 6:35 pm
# kiwi in america (1,487) Says:
October 19th, 2011 at 5:27 pm
Weihana
So define “a basic income” – how much? How is it delivered and answering “the government” is not an answer. You say a benefit is bureaucratic so what are you suggesting?
No I’m saying a benefit which requires active monitoring of recipients is overly bureaucratic. Obviously anything the government does will require some level of bureaucracy.
A basic income could be delivered by a variety of means. One way would be a negative income tax though that may create too much incentive for tax fraud and may also create too much administrative costs which would offset the benefits of getting rid of administrative costs related to monitoring of welfare recipients.
Alternatively the government could simply pay the basic income to everyone through taxation. While taxes would rise, for many a lot of the money would simply come back to them in their basic income. Ultimately what you still have is a transfer of wealth from rich to poor which is what we have now and in that respect there is not much difference.
The number one concern is work incentive and I don’t believe incentive would be hurt that much (obviously depending on how much the basic income is).
If you are actually interested in the idea see http://economix.fr/pdf/seminaires/H2S/forget.pdf which details some experiments on this subject.
Also I won’t say “how much” the basic income should be. I don’t know what figure would be best. That would be up to experts to consider. As a general guideline if it’s about what we already give to the poor through normal welfare then a similar amount would not likely have a significant impact on work incentive.
Vote:October 19th, 2011 at 6:46 pm
Weihana
Wages are certainly set by supply and demand but much less at the bottom end of the scale and not when it come to the minimum wage. Minimum wage laws raise the wage floor thus overriding market forces. Society deems it necessary to have a certain minimum but the debate is what that minimum should be. The case David puts is that NZ’s minimum wage as a percentage of our GDP per person per hour is very high by world standards. That tells us that we are already out of line and Labour’s populist appeal to raise it even higher distorts the market even further with the perverse impacts I detailed earlier.
I’d be surprised if you’ve ever had to hire and pay for staff. More profitable companies frequently pay their staff more even lowly paid unskilled workers and offer more and better perks. Good employers know that better pay and conditions over and above their competition can often mean they can recruit and retain better quality workers and that in turn boosts sales and productivity which in turn boosts profits.
The foundation wealth of any nation is its natural resources and/or its unique features such as scenery, proximity to major trade routes, climate etc. The extent to which these can be enhanced depends on the political, economic and legal systems that operate in the country. So North Korea’s commnist leaders have some raw materials to begin with (coal for example) but their ability to exploit natural resources and unique advantages is severly hampered by the drain that communism’s inefficient and bureaucratic mechanisms imposes plus the huge cost of police, secret service and military needed to supress its populace.
Whilst much of the infrastructure of NZ was build by the government mostly funded by offshore borrowing, it was the tax revenue that NZ governments made from taxing profitable businesses such as farms and freezing works that gave it the revenue stream that 1 made it a credit risk to lend to in the first place and 2 enabled the country to meet its debt obligations on time. The sovereigh debt rating of any country is nothing more than the reliablity of its tax revenues. You pass laws and enact policies that gradually reduce the profitability of your private sector (as Greece has done) then eventually the world rates your credit worthiness at junk bond status and they either wont loan to you or only at expensive rates of interest. Greece faces the unpleasant task of severely slashing its government funded services and pay rates AND raising its taxes to bring its house in order because the ever increasing burden of the state through regulation, over taxing and over spending has driven away young entreprenuerial talent (as happened in Sweden) AND whittled away at the profitability of existing companies. The erosion of the taxable base and the unwillingness to reign in spending to match the declining revenue inflow and the ability to borrow the difference with cheap German and French euro denominated debt has led to the current crisis that could trigger a new world recession.
Vote:October 19th, 2011 at 7:31 pm
Kiwi In America,
The case David puts is that NZ’s minimum wage as a percentage of our GDP per person per hour is very high by world standards. That tells us that we are already out of line and Labour’s populist appeal to raise it even higher distorts the market even further with the perverse impacts I detailed earlier.
Agreed. Though I don’t quite understand the logic re: Greece of raising taxes because of the “increasing burden of the state… over taxing”.
It would appear to me that Greece’s main problem was running structural deficits to fund things they couldn’t afford. They spent beyond their means and then even went so far as to hide their borrowing so they could continue spending. When you live beyond your means eventually there will be a day of reckoning.
Vote:October 19th, 2011 at 8:16 pm
Weihana: Thanks for the link to the pdf on the Canada/US experiments in GAI – most interesting, particularly the analysis of the Dauphin example – what a wasted opportunity, if only more funds were available to properly assess the experiment at the time.
Still, the analysis that was done (and has been done since) is interesting and seems to suggest that the idea is useful enough to pursue further.
Vote:October 19th, 2011 at 8:19 pm
KIA, Weihana and Lee
I am enjoying your economic ‘joust’.
Weihana
“Agreed. Though I don’t quite understand the logic re: Greece of raising taxes because of the “increasing burden of the state… over taxing”. It would appear to me that Greece’s main problem was running structural deficits to fund things they couldn’t afford. ”
The problem with Greece and it shares this problem with countries like Portugal, Italy, Spain and (to a leser extend) Spain is fourfold:
Vote:1. Tax avoidance. In the above countries, all Southern European ‘latin’ countries, it is almost a sport to avoid tax. It is not a case of raising taxes, it is more a need to reform the tax system and to police it better to increase the tax intake.
2. Corruption such as nepotism are rife in those countries. This happens at local but also at government level.
3. Taxes are not spend on infrastructure but on an inflated bureaucracy.
4. Political parties ‘buy’ votes with promises they cannot affort.
October 19th, 2011 at 8:35 pm
“The problem with Greece and it shares this problem with countries like Portugal, Italy, Spain and (to a leser extend) Spain is fourfold:”
Should read…
“The problem with Greece and it shares this problem with countries like Portugal, Italy, Spain and (to a leser extend) France is fourfold:”
Vote:October 19th, 2011 at 8:36 pm
TripeWryter 11.11
Cat got your tongue.
Vote:Never got over Fairfax rejecting your effort ?
October 19th, 2011 at 11:03 pm
Bereal: Cat never has my tongue. I went to work.
Vote:October 20th, 2011 at 7:00 am
Other Andy
Vote:YOu are spot on about Greece. Difference with France is that it has a good number of very profitable multi national companies that the PIIGS dont have so its revenue base is more stable and secure.
October 20th, 2011 at 8:39 am
@ Kiwi in America,
“So define “a basic income” – how much? How is it delivered and answering “the government” is not an answer. You say a benefit is bureaucratic so what are you suggesting?”
Gareth Morgan and Susan Guthrie have done a full costing of introduction of a guaranteed basic income in New Zealand. Check out their website http://www.gmi.co.nz/bigkahuna for background including calculators and scenarios.
The basic income is paid for by flat taxation of income and capital (they propose a comprehensive capital tax).
The model essentially works by taxing everybody and giving an equal transfer to everybody (their costed example is a transfer of $210 a week to every adult but could be higher or lower depending on the tax rate). The poor, sick, retired, disabled, unemployed and unemployable already receive a transfer. As Weihana points out, we are not willing to watch them starve on the street so we will continue to give them a transfer income. All the basic income does is make the payment universal thereby eliminating the need to administer a selective scheme. The costings in the book (which is worth the read) see an 18 billion dollar increase in government revenue and a 20 billion dollar increase in transfers distributed on a universal basis to workers and non workers alike (2 billion in government administration – from WINZ and IRD – is saved).
The system is far more economically efficient and socially equitable than the current progressive taxation, capital exemption and targetted transfer system in NZ. Roger Douglas actually tried to implement something not dissimilar in the late 1980′s but it was considered to radical a change and he was sacked not long after.
@Lee01
Vote:Don’t bother reading up on basic income or the Big Kahuna, you’d hate it. It goes against your ‘all taxation is theft’ moral foundation and assigns intrinsic value to human beings other than that determined by the market.
I feel sorry for you – it must be very tough living in New Zealand – your libertarian platform makes the Act party look like fuzzy socialists, John Key must be practically Stalin and Labour and the Greens are on another planet altogether…
October 21st, 2011 at 2:19 pm
@Kimble some may indeed be richer and some may be poorer. That is what the original post by DPF was intended to measure. I refute that measure because we are a first world/developed country and should hold ourselves to providing a first world standard of living for our employees. That means paying the same wages or better of comparable countries like those in the OECD rather than trying to be a mini China and acting like an industrial level or semi-developed country. That is why I showed an option of international dollars which is a way of showing that.
Vote: