Mana’s inflation policy

October 31st, 2011 at 7:00 am by David Farrar

I guess economic literacy is not high on ’s wishlist.  They say:

Immediately increase the to $15 per hour (1 April 2012) and peg it at two-thirds of the average wage (1 April 2013).

I guess someone has to outbid Labour/Greens who think higher wages come from legislation rather than economic growth. But Mana’s policy is even more stupid than the norm. Think about their pegging it to two thirds of the average wage.

In June 2011, it was $24.78, so two thirds is $16.52. So Mana’s policy is it should be illegal for a 16 year old to be hired for less than $34,500 a year.

But their policy will lead to never-ending increases, as if you increase the minimum wage, then you automatically increase the average wage. So even if there was nil wage growth for everyone else, the minimum wage would be going up.

If their policy was to peg it to the median wage, then it would just be moderately stupid rather than idiotically stupid.

I don’t know why parties of the left bother with all this in between crap. Why don’t they just come out and announce a minimum wage of $25/hr?

Tags: ,

27 Responses to “Mana’s inflation policy”

  1. KiwiGreg (3,249 comments) says:

    Your analysis leaves out the other important element – in order to peg at 2/3rds of the average wage it is very important to bring down those earning above average incomes. This is of course much simpler than trying to raise the minimum.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  2. slightlyrighty (2,471 comments) says:

    Why do the left not realise one simple truth.

    Sorry for shouting here.

    IF YOU MAKE IT MORE EXPENSIVE TO HIRE NEW STAFF, BUSINESSES WILL NOT HIRE NEW STAFF.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  3. wreck1080 (3,884 comments) says:

    Yes, and, this is exactly the same thing that constantly pushes up executive and board salaries.

    When the lowest paid use the higher paid as justification to increase renumeration, you get a constant upward spiralling.

    So, I’m getting cynical now, if it’s good enough for CEO’s / board members, then, why not the lowest paid?

    [DPF: You have a point on Board remuneration - if they all aim for the median, it pushes them up. I have seen this happen. That is why many Boards (outside NZX50) though aim for lower quartile to avoid that]

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  4. hmmokrightitis (1,586 comments) says:

    Im absolutely certain the parties of the left have undertaken extensive and rigorous research that confirms that every company in NZ can afford $15 per hour. After all, us business owners are all profit taking bastards, arent we? Driving around in our Audis.

    Or in my case, the 6 year old Falcon. What a bastard I am.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  5. vto (1,128 comments) says:

    Yep I’m with you lot. Abandon the minimum wage and compete with the chinese.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  6. Mighty_Kites (84 comments) says:

    While Mana’s policy is pretty stupid, this criticism is coming from the mouthpiece of a party that has promised to use the proceeds from asset sales three times over – paying down debt, keeping the income on the books AND upgrading schools and hospitals. John Key is the real economic wizard if he’s able to use the one lot of proceeds three times over

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  7. peterwn (3,243 comments) says:

    This concept is akready used to define ‘poverty’ as cited by ‘child poverty’ lobbyists. A NZ family living in ‘poverty’ would be regarded as living in luxury in the Third World. Such poverty would never be resolved as improvements merely raise the ‘cut off’evel.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  8. philu (13,393 comments) says:

    mr farrar…from my reading mana/harawira have been the only minor party to be so specific as to where the money would come from for their policies..

    example one:..

    ..mana would like to provide breakfasta & lunches in all low-decile schools…(cost:..$37 million per yr.)

    ..the cost of our soldiers fighting in that dystopian-nightmare..$40 million…

    ..bring the soldiers home..and feed the poor/sick children..

    ..a powerful and simple choice/message..

    ..example two…

    reversing the key tax cuts for the richest…

    ..would release the funding to hire every unemployed person in new zealand @$15 per hr..for 40 hrs per week…

    ..once again a simple/powerful choice/message..

    example three..mana want to do away with all of that regressive-tax..g.s.t…(the one that hurts the poorest the worst..)

    ..how to pay for it..?..i hear you ask..

    ..a 1% financial-transaction tax on the finance-industries…

    ..(a tax supported by the eu..and more political heavyweights than you can poke a stick at..)

    ..this would raise more than double the amount of revenue lost thru removing gst..

    ..and enable us to both end poverty in new zealand..and to rebuild/repair infrastructure/environment..

    ..once again…a simple/powerful choice/message..

    ..messages/choices that the most economically-illiterate can easily understand.

    plus of course the demand that the richest should pay a capital gains tax on their currently untaxed..(that’s zip/zero/nada..)..incomes..

    ..this rational upturning of the current paradigm to make a fairer/better world is what has both nats and labour and their mouthpieces..

    ..terrified of mana/harawira…

    ..they all well know the depth of the well of discontent harawira can draw from..

    ..and i repeat my prediction..

    ..mana/harawira will be the big surprise/upset of this election…

    phil(whoar.co.nz)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  9. Griff (7,517 comments) says:

    philup with lies

    students enrolled in deciles one to three 120,000
    cost per student day $5
    student days per year 200
    total cost 120000 * $5 * 200 =$120,000,000

    number of un employed 150,000
    hourly rate$15
    hours per year 2000
    total cost 150,000*$15*2000=$4,500,000,000

    napkin estimates but U get the drift. ..costs.. “that the most economically-illiterate can easily understand”..

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  10. Pete George (23,476 comments) says:

    Nanny state taken to new levels – whanau state.

    Families should take responsibility for feeding their own kids!

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  11. adze (2,105 comments) says:

    I can beat that hmmokrightitis, mine’s a 19 year old Toyota :)

    Mind you I don’t own a business (yet)…

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  12. The Gantt Guy (30 comments) says:

    So using your logic, DPF, why is it “idiotically stupid” for it to be illegal to hire an employee at less than $34,500 but perfectly sane for it to be illegal to hire an employee at less than $27,000 ($13/hour minimum wage, which it is at the moment). Are you suggesting that there are some jobs not worth $34,500 per annum, but there are no jobs worth less than $27,000 per annum?

    The fact is there are some jobs not worth $13 per hour. You are attacking the communists and their fellow-travellers, but you agree with them in principle. All you’re arguing about is the configuration, not the concept. The hypocrisy reeks.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  13. KiwiGreg (3,249 comments) says:

    @ The Gannt Guy – you’ve got it – that’s what the Nats are just Labour Lite. Differences of degree not philosophy. Helps when they long ago ditched any idealogy which might guide their thinking.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  14. Pete George (23,476 comments) says:

    It’s not hypocrisy, it’s political pragmatism that ideological purists don’t seem to get.

    If National proposed no minimum wage and Labour won the election guess what we get.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  15. philu (13,393 comments) says:

    apart from key/nact getting the arse…of course..

    ..and their is something else you neglect at yr peril..

    sue bradford is on board with mana..and her organisational-skills are legendary..

    remember..it was her who organised the green party to roll tanczos..

    (that on the promise from norman that he would support her when fitzsimons left..a promise he later reneged on..but that’s another story..and greens’ loss..manas’ gain..i say..)

    ..so as we speak..bradford has her networks..all over new zealand..out organising/campaigning for mana/harawira…

    ..and something else you should remember…

    ..what you should remember..(when looking at polls)..is that the poor do not have land-lines..they have pre-paid cellphones..

    ..and there is another simple mathematical calculation around the harawira/mana message you would do well to consider…

    ..that is that if all of the poor voted for mana…

    ..they would have/end up with half the seats in parliament..

    ..woo-hoo..!..eh..?

    phil(whoar.co.nz)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  16. Spoon (104 comments) says:

    @The Gantt Guy: It’s not the amount, it’s the fact it’d be a never ending spiral. The next year it’d be $38,000, then $41,000, and so on (numbers pulled out of thin air BTW). The problem is that it’s based on an index which would be altered by the resultant change. Pegging it to the median would work – assuming less than 50% of people are on the minimum wage.

    @Philu: You also bring up their financial transaction tax. The issue here is the profits might be quite small, say, 2%. Putting a 1% charge on this will destroy their margin and greatly reduce the amount of transactions – I’d wager it wouldn’t return half of what they’re hoping for.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  17. philu (13,393 comments) says:

    spoon..i am just reporting the wishes of most modern economists/many current political-leaders…

    ..so lets go with yr prediction..

    ..raising half that amount would still compensate 100% for the removal of all g.s.t..

    ..and gst is the tax that hurts most the poor/the poor-working..and increasingly..the middle class…

    ..the richest pay no tax at all on their capital-gains/financial-transactions..

    ..how can that in any way be argued as a ‘fair’ tax system..?

    .and as we have seen..has led to one child in five living in poverty..our infrastructure/environment fucked…

    ..and richest just getting richer hand over fist..

    ..it ain’t ‘sustainable’..eh..?

    ..between them..mana and the greens are arguing an end to poverty..and a return/advance to real sustainability..

    ..meanwhile key wants to flog off our energy-assets…to pay for six months of tax cuts for the richest..

    ..seem fair/reasonable/rational/economically-literate…eh..?

    phil(whoar.co.nz)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  18. philu (13,393 comments) says:

    griff..those figures i quoted/relayed are all provided/costed/confirmed by treasury…

    ..so..take their word…?..or yr welsh-napkin..?

    phil(whoar.co.nz)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  19. Lee01 (2,171 comments) says:

    Not a single poll has Mana doing anything more than getting racist nutter harawira back in, and even thats not a forgone conclusion.

    Philu is living in a drug induced fantasy world, as hus woeful understanding of basic economics proves.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  20. Lee01 (2,171 comments) says:

    There are no “poor” people in New Zealand.

    What we have in NZ is the result of decades of welfare socialism creating a permanent underclass of welfare addicts.

    Like philu for example.

    Poor is starving to death in Ethiopia.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  21. philu (13,393 comments) says:

    well leo..i guess come election night one of us will be right..eh..?

    ..i commit to publicly concede yr superior political-analysis skills..should i be wrong..in this forum..

    ..will you agree to the same..should you be wrong..?

    phil(whoar.co.nz)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  22. Lee01 (2,171 comments) says:

    philu,

    you have never been right in any political prediction you have made on this blog. Your living in a fantasy world. You do not engage in political analysis, you engage in fantasies that have no basis in reality.

    Get help.

    And get a job.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  23. Griff (7,517 comments) says:

    philup with lies

    Links please

    There is 154000 unemployed seeking work.http://www.dol.govt.nz/publications/lmr/lmr-hlfs-summary-fig01-large.asp you give the figures for income /hours. Numbers in decile 1 2 3 education dept rounded down http://www.educationcounts.govt.nz/statistics/schooling/july_school_roll_returns/6028. Cost of food good aproximation. including training for cooks, Kithens to apropreate standards, inspection, and admin costs etc
    I think you may have garbeled your figues or qualifiyers some whot

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  24. philu (13,393 comments) says:

    leo..right predictions..g.f.c..?..big/correct enough for ya..?..

    ..and i take it that is a ‘no!’..?..you won’t stand behind yr prediction.?….meh..!..to you..eh…?

    gruff..can i suggest you email treasury with yr concerns/questions…?

    ..the figures/outcomes are all confirmed by them..

    ..(commissioned work done for the c.t.u..as i understand it..)

    phil(whoar.co.nz)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  25. Other_Andy (2,612 comments) says:

    Child Poverty

    “Child Poverty” has nothing to do with “poverty”.

    From the Children’s Commissioner
    http://www.occ.org.nz/home/childpoverty/about_child_poverty

    In 2006/07 230,000, or 22 percent, of New Zealand children were still living in poverty. That is, in households with incomes below the 60 percent median income poverty line.

    From the Children’s Social Health Monitor
    http://www.nzchildren.co.nz/child_poverty.php

    Proportion of children with equivalised disposable household income < 50% or <60% current median

    Using this "definition", "child poverty" and poverty as such will NEVER be solved unless we are all either equally rich or equally poor.
    And THAT is the real goal when they talk about ending "Child Poverty".

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  26. philu (13,393 comments) says:

    what drivel are you banging on there..andy..

    ..you are making absolutely no sense…

    ..the most charitable interpretation is that you are cha-cha-ing on the head of a pin…

    ..and totally missing the point..

    ..so..there is no child-poverty in new zealand..?

    ..is this what you are saying..?

    ..phil(whoar.co.nz)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  27. leftyliberal (646 comments) says:

    @Other_Andy: You can quite happily have everyone earning more than 50 or 60% of the current median. No need for everyone to be anywhere near equal to achieve that, and certainly no need for the top end to be anywhere near the bottom end.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote

Leave a Reply

You must be logged in to post a comment.