The living wage

February 11th, 2013 at 4:00 pm by David Farrar

Simon Collins reports in NZ Herald:

Almost 750,000 Kiwis look set to be classed as the new working poor this week when the union movement fixes the value of a “” needed to have a decent life here.

The rate, expected to be $18-$20 an hour, has been calculated by researchers at the Anglican Church’s Family Centre in Lower Hutt to be “the income necessary to provide workers and their families with the basic necessities of life”.

This is not a living wage for workers. This is a living wage for people with kids. Now if the unions come out and endorse scrapping Working for Families, then there may be a case for their living wage.

But it is silly to claim a 16 year old guy living at home needs to be paid $19 an hour. Hell my first job was $1.99 per hour and even in my 20s I had a job which was only $9 an hour and another at $12 an hour.

The mistake all these campaigns make is to treat everyone as identical. Someone who is 45 years wold with 25 years of experience will and should get paid more than an inexperienced and unskilled 16 year old.

They are not asking for legislation, unlike the minimum wage of $13.50 an hour which is updated each year by law. A Cabinet decision on this year’s minimum is imminent.

As they are not asking for it to be legislated, I have no problem with the unions saying this is what we think people should be paid. But be aware this is not calculated on the basis of what you need to live on as a single person.  It also ignores entirely the fact those with children get significant welfare support through family tax credits, WFF and the like.

Now here is the one question that I doubt we’ll see reported today or tomorrow. How many fewer jobs would there be if every job in New Zealand was made at least $19 an hour?

The Herald has planned a series of articles all week, to promote the Living Wage campaign. Will a single one of their articles examine the cost? How much would it cost ratepayers? How much would it cost businesses? How many jobs would implementation of $19/hour see destroyed? Or will they just be a series of campaign-friendly articles?

Finally if you come from a party that thinks you can print money, and increasing wages doesn’t impact employment, then why stop at $19 an hour? why not $25? Why not $100?

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82 Responses to “The living wage”

  1. KiwiGreg (3,212 comments) says:

    Obviously something coming from a centre of academic excellence such as “researchers at the Anglican Church’s Family Centre in Lower Hutt” needs to be taken seriously. Particularly when pushed by a centre-right journalist like Simon Collins.

    I think you do him a great service by your use of the word “reports” as opposed to “spreads garbage in pursuit of the goal of spreading political propaganda”.

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  2. thor42 (971 comments) says:

    Yep – completely meaningless bumpf without a costing and an estimate of job losses.

    “The union movement”. Closely related to a “bowel movement.”

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  3. Manolo (13,516 comments) says:

    The social activists and intellectual giants behind this flimsy organisation: http://www.familycentre.org.nz/Staff/Staff_at_the_Family_Centre/index.html

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  4. alwyn (400 comments) says:

    There is a calculator on the IRD site that will calculate what WFF will pay you.
    I did a quick calculation assuming I worked 40 hrs/wk (actually 2000hrs/yr) at the minimum wage of $13.50 per hour.
    I therefore said I had $27,000 per year. I then said I had a non-working spouse and two kids under 12.
    I claimed very little in cash or other assets which seemed about right for that situation.
    The calculator says WFF will give me $217 per week, or about $5.50 per hour.
    This therefore brings me up to their desired figure of $19 per hour.
    If I was renting ($300/week in Wellington) I would also get $134 per week as an accomodation supplement.
    WFF seems pretty good for the low income earners. Pity you can still get it when you make about $100,000 per annum.

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  5. Morgy (171 comments) says:

    ANY data that the campaigners present is utterly useless without WFF being included. I heard Helen Kelly on the MLaws show this morning and we only heard about those on the minimum wage. Never with WFF being factored because that shits all over their argument.
    If though they are saying lets completely re write the tax enviornment in NZ including the full removal of WFF then I might be interested in a balanced conversation but this is not what they are on about.

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  6. Adolf Fiinkensein (2,830 comments) says:

    If only they would stick to saving souls.

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  7. artemisia (224 comments) says:

    There is in many cases, if not most, a significant difference between household income and a worker’s wage. Apart from the government topups such as WfF and accommodation supplement, many households have more than one income- traditionally the way folk make ends meet, save up a home deposit etc. If the ‘living wage’ campaign does not include household income it will be the target of plenty of eyerolling.

    Then there’s the usual elephants in the room – having kids and choosing to live on one income, being unskilled or uneducated, and articles forgetting to mention the HPs, payday loans, church and family donations, truck accounts …. all of which are voluntary and can easily push a family over the edge.

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  8. In Vino Veritas (138 comments) says:

    As always with Simon Collins, he is heavy on propaganda and light on balance. Of the 750,000 people earning less than $19 per hour, there are those that are in a job not worth $19 per hour. There are those that are in two income families that as a unit, have a reasonble income. There are kids that shouldn’t be earning $19 an hour until they prove their worth. Many businesses that would employ people wont be able to afford $19 per hour. But none of this makes the Herald in Simon Collins article. The man is media lightweight and based on the other drivel he has had published, he should be put out to pasture, along with his editor that allows this stuff to make the paper.

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  9. Viking2 (11,261 comments) says:

    and don’t forget that any day now that “nice” Mr Key and his “nice” gov’ment will make that luv’ly gesture of raising the minimum rate to $14.50
    never mind the consequences of a world full of unemployed people in other countries who will do the same work for less.
    Add our dollar to the equation and Julia will be visited by a lot more Kiwi’s. Enough that we will change their Govt. and their benefit system so more of us can go.

    The rest can stay and become tour guides to all those Chinese Visitors who are keen to move.

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  10. dime (9,662 comments) says:

    maybe they want WFF scraped?

    im cool with that

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  11. scrubone (3,082 comments) says:

    But it is silly to claim a 16 year old guy living at home needs to be paid $19 an hour. Hell my first job was $1.99 per hour and even in my 20s I had a job which was only $9 an hour and another at $12 an hour.

    I knew someone who had a job at $20/hr shortly out of varsity for a few hours work. His flatmates coudn’t believe it.

    But the reason he could charge so much was he had the training to do the job *and* a professional would have charged much, much more for the same work.

    What we are talking about here is giving people more than they are worth on the open market. This is about paying people more because you want them to live better. I agree with Kelly that this will reduce turnover (duh!) and may even pay off. But ultimatly if you want a higer standard of living through having more income you should make the decisions (and discipline yourself) that will end up with that result down the line.

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  12. decanker (222 comments) says:

    Scrapping WFF is something I agree with. alwyn’s post up there highlights what a shambles it is. If anything it’s just keeping wages down.

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  13. Camryn (551 comments) says:

    If I read the Herald article correctly, the “living wage” is accounting for tax credits and welfare etc associated with the two parent, two child family. It’s the remainder that needs to be actually earned (rather than paid by other earners). So, that’s fine but how they’re taking this household income and converting to individual hourly rates is nuts. I mean, even the example household they’ve based it on has two earners… so the hourly rate should be 19/2 = $9.5/hr. For those without dependents you could go lower… but $9.5 is below the minimum wage anyway. So… typical beat up. Can we get some NZ private equity to take over the Herald and take the editorial tone back out of the hands of the kids running the candy shop (i.e. the journalists)?

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  14. David Garrett (6,731 comments) says:

    When I went to parliament I was a firm believer in a minimum wage – I would probably have been relatively easily convinced of the need for a “living wage”. At least until WFF was explained to me.

    Then Roger Douglas had a wee chat with me…it went something like this. The unemployed young man with no qualifications is not worth $13.50 an hour to an employer since he has no skills, and perhaps not even a work ethic capable of getting him to work on time and ready to go five days a week. So he sits at home on the dole, playing X box (I had to explain those to Roger) and watching mindless videos. (Let’s assume he is not smoking dak supplied by his friends) On the dole he is getting “paid” about $3.50 an hour to vegetate, and rapidly become completely unemployable.

    If the minimum wage was – say – $5 an hour someone would probably hire him…to make the tea, keep the smoko hut clean, sweep the floor, perhaps do errands. Even if that’s all he ever manages to do, he is better off financially and psychologically than sitting at home staring at the tele. What is truly scandalous is that the unions KNOW this to be true; five minutes on the net provides 10,000 articles saying what bad effects arise from sitting at home doing nothing.

    More likely of course, the errand boy/dishwasher/floor sweeper will fill in a gap which arises higher up the food chain, and thus move up from $5 an hour to $10 or 20….but even if that doesnt happen, it beats sitting at home, both for him/her and for society as a whole.

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  15. krazykiwi (9,189 comments) says:

    If people want more income they have three choices any of which are viable in the long term:
    (a) Work longer hours
    (b) Gain more in-demand skills to secure a higher effective hourly rate
    (c) Both (a) and (b)

    Absolutely any NZer can achieve (a), (b) or (c). It just takes a little determination, and/or risk-taking.

    Of course the fourth option is to bleat for the government to regulate, which is a coded request that NZ should quickly become more like Greece or Spain.

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  16. m@tt (608 comments) says:

    Hang on a minute
    If the living wage campaign was 100% successful then WFF would be scrapped and instead employers would have to pay the real cost of providing a decent wage instead of tax payers having to prop people up all over the place.
    I would have thought the majority of Kiwiblog commenters would support this.

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  17. scrubone (3,082 comments) says:

    Let’s keep this really, really simple.

    Working for families is designed to pump large amounts of money into less well-off families.

    If that’s your solution to poverty, you first have to explain why it isn’t working.

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  18. Alan Wilkinson (1,848 comments) says:

    @m@tt, suggest you reread David Garrett’s piece with comprehension turned “ON” and then revise your accounting.

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  19. Rightandleft (655 comments) says:

    When I was at univeristy and for a few months after finishing I worked for the minimum wage of the time, $12 and then $12.50 an hour, and I lived just fine on that, even at less than 40 hours a week. I had a couple flat-mates, drove a used car, didn’t do much travel and didn’t drink or smoke. I made choices that let me live comfortably on that wage. This campaign is all about a family wage. That’s where they’re making their mistake. Raising wages to the levels they’re talking about would not only cost jobs it would inflate the cost of living for everyone when we’re already subsidising these families through WFF. Unions serve an important purpose in their respective industries but they need to stop going beyond their remits and playing politics in general.

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  20. Viking2 (11,261 comments) says:

    Here’s how we could sum up ths rubbish.

    http://screencast.com/t/hXDDmXvtA

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  21. OneTrack (2,806 comments) says:

    “As they are not asking for it to be legislated, ”

    That is next months campaign. They have to wear people down a bit first.

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  22. Viking2 (11,261 comments) says:

    Providing New Zealanders with a living wage is not high on the Government’s agenda and it is unlikely to support the campaign, Prime Minister John Key said today.

    Speaking at his post-Cabinet press conference, Mr Key said it was up to companies whether they paid a rate above the minimum wage and above $18.

    The living wage campaign will be launched on Thursday by unions. It calls for wage rates families can realistically live on and is expected to be $18-$20 an hour.

    The minimum wage is $13.50 an hour.

    “The only area where the Government plays a role is in setting the minimum wage. If you ask me whether we intend to raise the minimum wage to $18 a hour, the answer is no, not in the next 12 months,” Mr Key said.

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10864742
    ————————————————————————
    So as I predicted Slippery key Hasn’t said NO we will not be doing this, just not in the next 12 months.
    Next announcement will be this year it is going to $14.50.

    As bad as that Cullen prick.
    National the Party of Freedom
    Fuck off.

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  23. kowtow (7,925 comments) says:

    New Zealand is a low wage economy,that’s a fact.

    Governments of both persuasions top up earnings/income ( subsidise employers,public and private with taxpayer and borrowed money) in order to win elections.

    Doesn’t make any sense and is unsustainable.

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  24. m@tt (608 comments) says:

    @alan
    If you are happy to continue advocating for the state to prop up the under employed, there by subsidising their employee, then all power to you.
    I’d rather the employer pick up the tab. That at least gives me, as a consumer, some control over where my money goes to become someone else’s income. Something you can’t do when is a state controlled benefit paid from your tax.

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  25. Manolo (13,516 comments) says:

    As bad as that Cullen prick.

    At least Sir never denied his socialist creed. Neville wears it in the closet.

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  26. duggledog (1,431 comments) says:

    Life has winners and losers. It’s how it is in nature. Winners routinely come from loser families, losers often come from winning families. We all know people like this. Why the Greens of all people get so exercised and try so hard to reverse the natural order is beyond me.

    I can see their point somewhere like, say, India, most of Africa etc but I can’t go with this line in New Zealand. This isn’t Dickensian London FFS.

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  27. bhudson (4,736 comments) says:

    That at least gives me, as a consumer, some control over where my money goes to become someone else’s income.

    m@tt,

    I take it you do realise you have just agreed with the principle behind the National tax re-balancing – reducing income tax and raising consumption tax? And also advocated for further tax reductions.

    Congratulations

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  28. David Garrett (6,731 comments) says:

    Further to my 4.44, I was in Rotorua during the August school holidays when I heard a young guy who was running one of the tourist attractions ranting about how dreadful youth rates were, and how glad he was that the Labour gummint had abolished them. I was unable to resist talking to him along the lines of my first post above.

    He listened politely and then said that he had never thought of it that way…I asked him if he was on the minimum wage,,,,he said “shit no, way more than that”, very proudly…I asked him if he had started on it…he had…He smiled and clapped me on the back as he realised the point I had just made.

    Roger Douglas was never the kind of communicator to get this message across…If I was still in parliament I mightn’t do much better, since I am an impatient person with a very low tolerance for fools…but SOMEONE in the Nats would have the touch, surely? Bennett? Nicki Kaye? I can’t off the top of my head think of any blokes in the Nats who might have it…Simon Bridges?

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  29. Kea (11,878 comments) says:

    Viking2 (8,766) Says:
    February 11th, 2013 at 4:21 pm
    and don’t forget that any day now that “nice” Mr Key and his “nice” gov’ment will make that luv’ly gesture of raising the minimum rate to $14.50

    I am now going to sound like a commie, just like Red said :)

    If you can not afford to pay your staff at least that much, in this day and age, then your business is not viable. There are some very good arguments on both sides of the minimum wage debate. My natural leaning is less government intervention. However we need to have some sort of standards in our society, as arbitrary as they may sometime be. Expecting people to live on less than than the current minimum wage falls below what I am personally willing to accept.

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  30. Anthony (785 comments) says:

    I have two Uni students living at home and earning no money because they can’t get a job – so all their expenses are paid for by me and student loans. They don’t need to earn a ‘living wage’, they need to earn enough to make it worthwhile turning up to a job!

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  31. PhilP (159 comments) says:

    @ David Garrett 4.44pm

    Well said Sir…..give that man a Tui (or a Pinot?)

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  32. Alan Johnstone (1,080 comments) says:

    Does WFF really subside the people they get it or their employers by allowing low wages? I’m pondering this a bit just now.

    Same with accommodation supplement, is it just a middle class welfare bung flung towards baby boomer landlords ?

    It seems both of these are just transfers from people that pay net tax from job towards landlords and business owners. Minimum wage falls into this category too.

    Increasingly I’m of the view that the entire in work welfare system is a waste of time that just distorts markets, costs money in administration and most damningly hurt the people it’s supposed to help.

    The whole thing should be scrapped

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  33. Alan Johnstone (1,080 comments) says:

    @David G 4:44pm;

    The problem we have is that the person in your anecdote thinks he’s somehow entitled to that $3.50 an hour and therefore he’s effectively working for $1.50, a chunk of which he’ll pay in tax.

    The delta between what he’d get working and what he’d get sitting at home on his arse is next to nothing. Well less than $1 an hour. In that situation, if he sees no prospect of advance, would sitting on your arse be the correct choice ?

    If you incentive people to do stupid things then they well. Administrations of all political colours have failed to deal with this for 50 years, hence we’re where we are today.

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  34. swan (659 comments) says:

    “Expecting people to live on less than than the current minimum wage falls below what I am personally willing to accept.”

    Well this should be dealt with via welfare, not via the minimum wage which is little more than wishing something is so. Saying people deserve more than the minimum wage is like saying people deserve to live longer than 100 years, and the government should pass a law making it so.

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  35. krazykiwi (9,189 comments) says:

    Administrations of all political colours have failed to deal with this for 50 years

    No, I think this has been deliberate.

    Not in a master-plan kind of way.

    More incremental.

    With the loss of formalised religion functioning as the opiate of the masses, another dependency-creating vice was needed. The burgeoning welfare state was, and remains perfect for this. As the percentage of the population who depend on the largesse of the state has increased, so too has the control the government has over us.

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  36. cha (3,853 comments) says:

    With the loss of formalised religion functioning as the opiate of the masses, another dependency-creating vice was needed.

    Arse. The fortune of the poor has always waxed and waned.

    http://www.aeonmagazine.com/living-together/peter-turchin-wealth-poverty/

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  37. thor42 (971 comments) says:

    Maybe someone can tell me how (say) an orchardist can make a profit if he has to pay his fruit-pickers $19 per hour.

    If I were an orchardist faced with paying that, I’d probably lay off my workforce and invest in a *machine* to pick fruit. ( Well done, unions – you’ve just helped a few people lose their jobs. )

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  38. bhudson (4,736 comments) says:

    The delta between what he’d get working and what he’d get sitting at home on his arse is next to nothing. Well less than $1 an hour. In that situation, if he sees no prospect of advance, would sitting on your arse be the correct choice ?

    So with the delta to the minimum wage being some $10/hr (less tax), what incentive does that provide him?

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  39. Johnboy (15,564 comments) says:

    Why he could sell his apples to the newly rich workers for $20 each thor42!

    (Russellnomics 101) :)

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  40. thor42 (971 comments) says:

    krazykiwi @7:42 – I agree.

    Someone please show me *ONE* direct measure that the Clark Labour government did that lessened the dependency of the low-paid or beneficiaries on the government. I *can* give you one that *increased* dependency – WFF.

    Labour *depends* on the beneficiaries, the low-paid and the ignorant in order to get votes. Those groups *depend* on Labour in order to get money thrown at them. It’s a symbiotic relationship.

    If everyone in this country suddenly became rich, Labour would never be in government again.

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  41. Johnboy (15,564 comments) says:

    So we should raise the minimum wage to say $100+ and we will all vote National (or God forbid ACT)?

    I like the way you are thinking thor42! :)

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  42. David Garrett (6,731 comments) says:

    Alan J: I dont know the answer to that problem…I am literally paraphrasing how Roger Douglas explained it to me…I am assuming those here who understand what “delta” means in this context (I don’t) can also have a stab at answering your question….is the ansa something to do with Roger’s idea of tax free thresholds for the first $X 000 of everyone’s income?

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  43. Kea (11,878 comments) says:

    swan (471) Says:
    February 11th, 2013 at 7:37 pm
    “Expecting people to live on less than than the current minimum wage falls below what I am personally willing to accept.”

    Well this should be dealt with via welfare, not via the minimum wage…

    The trouble is… where does the welfare money come from ? It comes from tax, a percentage of which is lost through the bureaucratic process of collection and distribution. It is more efficient to just pay a reasonable amount.

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  44. Johnboy (15,564 comments) says:

    Delta means difference David. Mans trying to tell you he understands calculus! :)

    He will explain the Theory of Relativity to you shortly! :)

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  45. bhudson (4,736 comments) says:

    DG,

    If income included that from benefits (and in this egalitarian country of ours, I don’t think there is any indication it wouldn’t) then, no, it wouldn’t help at all.

    And that is the problem with Sir Roger’s otherwise logical argument – if the delta between income earned and income through welfare is not sufficient, then we risk people deciding that life is better, on balance, on welfare.

    That leaves only the stick approach to dealing with the problem – cutting benefits to create the delta. Some might say that is fair enough – people could choose to work. Unfortunately the centre-right would not spend enough time in government to make a difference (and, of course, its reforms would be undone by the Left.)

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  46. Colville (2,172 comments) says:

    Maybe someone can tell me how (say) an orchardist can make a profit if he has to pay his fruit-pickers $19 per hour.

    NZers are far to lazy to pick fruit, we import PI’s and pay them under the table because its too much trouble otherwise.

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  47. Kea (11,878 comments) says:

    If less tax was gobbled up with WFF and the unsupported parent benefits (paying women to fuck and spit out kids) then it would be easier for employers to pay a reasonable wage, without increasing costs to the business.

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  48. Johnboy (15,564 comments) says:

    Or they could just update their BMW a year early Kea. :)

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  49. Kea (11,878 comments) says:

    Johnboy, the BMW’s are possibly being driven by the hookers who are on the benefit (paid to fuck) then are on the game (paid to fuck some more) working under the table and paying no tax.

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  50. KevinH (1,151 comments) says:

    To a middle aged conservative out of touch with youth, going to work for $5 an hour sounds plausible. However to a youth that sort of thinking is crap, he/she would rather sit around the house texting or mucking around and picking up the dole to score some weed or P because that sounds better than going to work for crap money in a crap job.
    Youth today are just not motivated enough to get out there and work for low wages and need to be incentivised with the prospect of earning a reasonable wage and the chance to progress. Those sort of guarantee’s just don’t exist anymore because of the changes in the economy in the last 25 years.

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  51. bhudson (4,736 comments) says:

    @KevinH,

    Welfare dependency is slavery. Those that would perpetuate the dependency, slavemasters.

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  52. Johnboy (15,564 comments) says:

    That will be the second hand, import, shit heap BMW……..much in demand by classy, upwardly mobile chaps of darker hue and their slappers Kea. :)

    Wont be your brand new 760Li SE at $348,500.

    That would be for folks that work for receivers or suchlike!

    Similar ethics just a different style! :)

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  53. Alan Johnstone (1,080 comments) says:

    @ David G

    “Alan J: I dont know the answer to that problem…I am literally paraphrasing how Roger Douglas explained it to me…I am assuming those here who understand what “delta” means in this context (I don’t) can also have a stab at answering your question….is the ansa something to do with Roger’s idea of tax free thresholds for the first $X 000 of everyone’s income?”

    Sorry, I write as I speak, I work in a fairly maths heavy profession so sometimes phrase things poorly. My bad.

    Working needs to be clearly be better than not working. Right now the welfare and tax system removes incentives to work; there is often a case to be made that staying on a benefit is a rational course of action. If the difference between a week at home on your arse and a weeks low paid manual work isn’t high enough, people will not do it.

    I tend to think you may have a point about tax free or near free thresholds. I think we should have them and they should be at a fairly serious number, perhaps as high as $40,000 a year. Flat rate tax at 5% to $40k and scrap WFF et al.

    I don’t have the answer either, but the problem is clear.

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  54. Alan Johnstone (1,080 comments) says:

    ” Maybe someone can tell me how (say) an orchardist can make a profit if he has to pay his fruit-pickers $19 per hour. ”

    But he already does effectively, it’s just done from transfers from his tax payments, via the state and back to his workers in the form of WFF and other state payments.

    It’s a sick farce with extra administration costs which helps no one.

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  55. Nostalgia-NZ (5,038 comments) says:

    Labour will be loving this, votes by default. If the rate was increased a higher calibre person would be competing against the not so. That’s good for the economy, productivity, competitiveness, ambition and so on, as is extra cash spent in the wider economy.

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  56. PBJ83 (27 comments) says:

    If you come from a party that thinks low wages is a good way to improve employment, why not lower the minimum to $10 or why not $2. Think of the employment rate! It’d be rock bottom!

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  57. bhudson (4,736 comments) says:

    N-NZ,

    How does using less skilled resource increase productivity?
    How does increasing costs improve competitiveness?
    How does increasing wage costs not lead to lower employment?

    You will end up with the same amount of cash in the economy, not more. Unless you count increased unemployment benefit payments – but that would only hold true if the govt decided not to reduce spending elsewhere to compensate for the increased benefit spend. In which case that would be inflationary, leaving workers and beneficiaries less well off.

    Keynesianism is not so much a dream, as a nightmare.

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  58. hamnidaV2 (247 comments) says:

    What kind of sick employer would pay a worker less than $19 an hour?

    How about not upgrading the BMW this year and giving workers’ a fair deal.

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  59. Sadu (129 comments) says:

    So Labour et al focuses all their attention on trying to regulate that employers have to pay people more than they are actually worth to the business. There’s no effort whatsoever going into actually making sure that the person can deliver any value.

    And this is the problem. Employers do not see themselves as being glorified welfare providers – they want value from the people they employ. It really is that simple.

    People who can’t find work or can’t find good-paying work need to up their game so they are worth more – whatever form that takes. Maybe it’s as simple as going to bed a bit earlier so you are fresh in the morning and don’t growl at customers. Maybe it means losing 10kg and toning up so you can lift more bricks in your wheelbarrow. Maybe it’s as simple as buying a stick of deodorant and some dandruff shampoo so you get taken seriously at interviews. Whatever.

    It’s all about value.

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  60. Australis (100 comments) says:

    The Herald is the leading ‘paper of record’ for a third of New Zealanders.

    Yet this newspaper aims to run a populist campaign (apparently based on the rose-tinted views of some unnamed economist)contending that the supply side of a labour market can dictate its own price! Neither Marx nor Engels went this far.

    The Herald’s uber-left plan for the Peoples’ Republic of Auckland relies on all market realities being suspended. Employers will be directed to pay some of their employees (a planners’ view of) “a living wage”, as their first priority. All remaining employees, who are not worth that much to the firm, will be made redundant. Firms will shrink as necessary, but must continue to pay the same taxes to fund the benefits for all the newly unemployed.

    I assume the editor is not a simpleton. He must know that mandating massive labour productivity decreases can’t possibly work. So what is his objective?

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  61. seanmaitland (472 comments) says:

    Gotta laugh at your comments Alan Johnstone – way, way too simplified to be anything near reality.

    The Working For Families that fruit pickers potentially does not come from the Farmer’s tax. Given the debt he will have taken on to buy his land and all the costs of his business, I would imagine he wouldn’t be turning much of a profit in the first place.

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  62. David Garrett (6,731 comments) says:

    PBJ (where do they get these handles?) You clearly haven’t understood the discussion at all…and is the missing “un” in front of employment intentional or a typo?

    You haven’t actually made any sensible rebuttal to the argument against a minimum wage – or at least against one only marginally above the dole divided by 40 hours….you have just made some stupid statement, possibly complete with a typo that makes it utterly meaningless…

    Better stay working for the gummint I think son…

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  63. Graeme Edgeler (3,276 comments) says:

    PBJ (where do they get these handles?)

    I assumed PBJ83 was essentially akin to you having chosen DAG58.

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  64. David Garrett (6,731 comments) says:

    Except I, like you Graeme, dont feel the need to hide our identities…but that’s a whole other debate (and thanks for the extra year…)

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  65. Rufus (646 comments) says:

    The Anglican Church came out with this? Obviously too much time on their hands and not enough election signs for them to deface.

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  66. Shunda barunda (2,966 comments) says:

    Whoa! let me get this straight!, the Left are so confused and blinded by their ideological hatred of the current government that they unwittingly advocate to revoke one of their greatest social engineering coups out of sheer spite??

    Oh good grief.

    Don’t they understand that giving people their own money back will only foster personal responsibility and less state reliance?

    Everyone be very quiet…..

    THIS IS A GREAT IDEA!!

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  67. Harriet (4,614 comments) says:

    WHAT ROGER DOUGLAS DIDN’T CHAT TO DAVID GARRETT ABOUT -

    That in the early 80′s Douglas himself stopped SUBSIDISING all farmers – and their families – it’s worked – most farmers are now ‘rich pricks’.

    And now Garret believes that ALL OTHER businesses in NZ should be subsidised via WFF – because Douglas said so!

    Matt#
    “… Hang on a minute Garrett…..If the living wage campaign was 100% successful then WFF would be scrapped and instead employers would have to pay the real cost of providing a decent wage instead of tax payers having to prop people up all over the place…….I would have thought the majority of Kiwiblog commenters would support this….”

    Quite right Matt……as another who supports your view is a banking executive in Sydney who stated to the Australian media thus-

    “If a business fails to pay a living wage, should they really still be in business?

    Maybe Garrett can tell us if business should be supporting his socialist dream via business tax funded subsidies[wff] – or instead using the taxes to grow those businesses for the benefit of staff, shareholders and FUTURE workers?

    I’m glad I left the country! :cool:

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  68. Keeping Stock (10,170 comments) says:

    I’m going to call a meeting of my staff today, and offer all of them a minimum of $20 per hour. They will then have half an hour to decide who gets the pay rise, and who gets made redundant.

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  69. hannity (152 comments) says:

    Dpf says, “why not $25 or $100?
    Why not $5 or $0 its just as disingenuous?
    Full compulsory employment at $0 ph,
    Is that Nationals’ policy?

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  70. hannity (152 comments) says:

    Keeping stock, Bullsh*t,
    Sounds like your business is overstaffed, No wonder youre struggling, being able to shed staff, at half an hours notice.with out effecting capacity.
    Or do you plan to get your hands dirty for a change? That will do your attitude no harm.

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  71. Monique Watson (1,062 comments) says:

    I can just see you in my minds eye, hamfisted Hamnida and trusty sidekick Hatey Hannity.
    Right about now you’ve got the doe eyed look in your eyes as you exhort your fellow socialists to take action against the “wicked evil rich”. Your type try to suck everyone in by looking like jehovah’s witnessess whilst harboring hatred.
    For the most part it’s a delusion. It gives you purpose in your life to be part of a collective and you can’t bring yourself to face the fear process that gives you the ability to stand alone as an independent adult.

    It’s a cult guys and that tit Russell Norman is the biggest purveyor.

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  72. KiwiGreg (3,212 comments) says:

    I’m always a little astonished that the same people who would advocate raising the price of alcohol to discourage drinking fail to see that raising the price of labour will discourage hiring. This isn’t only minimum wages (which relatively few people earn for any length of time) but also all the myriad other costs the state imposes on those who would provide gainful employment.

    Of course I am giving them the benefit of the doubt that they are actually arguing from a position of intellectual honesty…

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  73. Mobile Michael (430 comments) says:

    Glad to know I’m on more than a living wage. Only took years and years of hard work and sacrifice. Suggest all those who want to earn more try it. And no, I’m not somerich kid parachuted into the family company or somehow lucky to have my job like socialist generally think.

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  74. Griff (6,989 comments) says:

    Keep pushing the profits up
    keep the management incomes increasing exponentially
    We will end up with a small rich minority and a massive poor underclass
    then the rich will be happy .
    The growth in management incomes has not resulted in a increase to shareholders returns.
    Both shareholders and workers are being screwed by the greed of management.
    When someone in a public company gets 100times the minimum wage you have to ask do they add that much value?
    Sack the manager no change in performance
    Sack the workers the company goes broke in days
    who is more valuable?

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  75. hannity (152 comments) says:

    Whiney Watson. youre wrong again, but youve probably learned to cope.
    Explain why an employee should, subsidise an unprofitable business.

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  76. woodburner (28 comments) says:

    Had a rough think about the scale of this. Stats NZ says there are about 679,000 people earning under $200 per week. Probably includes people on ACC/DPB etc. But, making the assumption that those 679,000 people are all in a minimum wage job, that means the NZ economy would have a $3.7m increase in wage bill per hour. That comes out to be a $7.7 billion increase in wage costs over a year.

    I certainly haven’t seen any evidence that the economy’s productivity could be increased by that value, from effectively unskilled labour sources. Perhaps huge scale investment in high-value, labour heavy commodities like saffron??

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  77. Sadu (129 comments) says:

    Why is management always portrayed as this big evil, incompetent thug who earns too much?

    I run a small business and I employ one person. I’m really getting sick of hearing how much of a cunt I am for being an employer / business owner. But honestly, I’m just like any other working Kiwi. It’s what I do to feed the family. I like the flexibility it gives but I get no sick pay, no holidays, no kiwisaver (can’t afford to pay myself that), no job protection etc etc. All of this state-imposed stuff that I pay my employee I don’t get myself.

    So when everyone else starts moaning about how they don’t earn a living wage – fuck off. Or about how management doesn’t work hard or add any value to a business – fuck off. Or that business owners should just pay people more – fuck off.

    Create your own value. If you want $18ph, go deliver $18ph worth of value to someone or start your own business. It’s not the employer’s job to cushion you from the real world.

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  78. Ryan Sproull (7,059 comments) says:

    Why is management always portrayed as this big evil, incompetent thug who earns too much?

    I run a small business and I employ one person. I’m really getting sick of hearing how much of a cunt I am for being an employer / business owner.

    Sadu, I think most of that kind of sentiment towards business owners is intended for much larger businesses than yours.

    As for delivering $18ph worth of value in order to be paid $18ph, it doesn’t really work like that. The price of a person’s labour in our system is not determined by how much value they provide to the company. It is determined by how little an employer can pay an employee to fill a role, as dictated by the labour market.

    If you have a role in your business that creates, say, $100/hour of value to your business, and there are a number of people looking for work who would be willing to do the job for $15/hour, you only have to pay them $15/hour. Pay only becomes too low when there is no one willing to do that job for that pay, and with a surfeit of labour (as there is for unskilled work) that can be very low indeed.

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  79. hannity (152 comments) says:

    You could go get a job if you don’t like your circumstances Sadu, its not employees job to cushion you from the real world.
    seriously tho , why are nz Tax payers ,subsidising unsustainable low wages ,through accommodation supplements, wff etc.
    Some business owners need to stop moaning about their poor business decisions, and go get a job with a profitable business.

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  80. Sadu (129 comments) says:

    Sounds like Hannity is an expert on everyone’s apparently overstaffed and unprofitable businesses.

    But I’m just saying that employers will pay people based on the value they bring to the company. But don’t price people out of the market who aren’t actually worth $18 per hour, and don’t assume that anyone who doesn’t pay $18ph is being miserable.

    Gotta agree about WFF though. It’s a seriously weird policy.

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  81. Nostalgia-NZ (5,038 comments) says:

    bhudson (3,266) Says:
    February 11th, 2013 at 9:54 pm
    N-NZ,

    How does using less skilled resource increase productivity?
    How does increasing costs improve competitiveness?
    How does increasing wage costs not lead to lower employment?

    You will end up with the same amount of cash in the economy, not more. Unless you count increased unemployment benefit payments – but that would only hold true if the govt decided not to reduce spending elsewhere to compensate for the increased benefit spend. In which case that would be inflationary, leaving workers and beneficiaries less well off.

    Keynesianism is not so much a dream, as a nightmare.’

    I’m not saying using less skilled, but rather seeing people upskill into higher paying jobs. The competitiveness is in the flexibility of being able to hire staff whose expectation is to respond to a higher paying job with increased effort. The more money earnt and spent in the economy shouldn’t have a negative factor on unemployment – but that isn’t contingent on what I said.

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  82. hannity (152 comments) says:

    Nostalgia, sounds good on paper.
    If you ignore the fact ,that , if a check out operator does upskill and get a better job,
    their old job is still there with someone else earning an unsustainable wage.
    With service type jobs on the rise, Isnt it just denial that , at any given time, a huge chunk of society have to be stuck in a job thats so poorly paid, they need to supplement their income via WFF, accommodation subsidy etc.
    Who is going to clean your toilet, when all the toilet cleaners have completed their Phds?

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