Pay rises for everyone!

September 8th, 2013 at 11:00 am by David Farrar

The Herald reported:

Almost half of all women and a third of men earn less than $18.40 an hour – a rate which two Labour Party leadership contenders have promised to implement as a “” in the state sector if they win power.

I’m still bemused that Labour now believes the effective minimum wage should be determined by Rev Charles Waldegrave of Lower Hutt! What will they do if next year he declares it should be $27 an hour!

Would-be Labour leaders Grant Robertson and David Cunliffe promised this week to raise minimum wages for government employees and contractors to $18.40, which unions and church groups say is the minimum required to meet the basic needs of two adults and two children where one parent works fulltime and one half-time.

This is why it is insanity to use the living wage as a de facto minimum wage. The living wage calculation is based on a very specific family situation that does not represent the vast majority of workers. Why would we say a 16 year old should have the same income as a 40 year old parent with two children?

Institute of Economic Research director Jean-Pierre de Raad said the figures confirmed that a living wage would be “harmful to the employment prospects of young people”.

Yep. Who is going to hire a 16 year old on a $38,000 a year starting salary?

“The data also confirm questions about the logic of the living wage,” he said. “The $18.40 figure is based on the expenses faced by a notional median nuclear family … earning the median household income.

My point. It is voodoo economics to start insisting this should be a minimum wage across the board for all employees.

“But a large proportion of those on low wages are the young … who will improve their incomes over time as they get work experience.”

I heard a great quote on a podcast today. The best way to eventually get a higher paying job, is to get a lower paying job. Saying that every adult in the public sector (or contractors to it, which is most of NZ) must start on at least $38,000 a year is nuts.

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48 Responses to “Pay rises for everyone!”

  1. jaba (2,141 comments) says:

    so $18.40 if you live in Akl and $18.40 if you live in Patea?

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  2. Cactus Kate (551 comments) says:

    Saying that every adult in the public sector (or contractors to it, which is most of NZ)

    In brackets precisely the problem with NZ.

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  3. Harriet (4,970 comments) says:

    ‘Base pay’ or ‘wage’ is simply the cost on a business to replace you.

    Anything above that is charity! :cool:

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  4. hj (7,011 comments) says:

    A lot of low income people are paying high rents thanks to Nationals property investor favouring policies.

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  5. wat dabney (3,756 comments) says:

    A lot of low income people are paying high rents thanks to Nationals property investor favouring policies.

    Er, a policy which encourages the rental sector results in high rents?

    Don’t give up the day job mate.

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  6. Redbaiter (8,823 comments) says:

    “Living wage” is left wing language.

    “Asset sales” is left wing language.

    National needs to wake up and stop buying into left wing political paradigms that are designed to suit propaganda objectives rather than allow reasoned debate.

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  7. beautox (422 comments) says:

    This Waldegrave chap is going to find a lot of money and whores coming his way from his new union mates. After a year the living wage will be $30+

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  8. hj (7,011 comments) says:

    Er, a policy which encourages the rental sector results in high rents?
    ………………….
    As Gareth Morgan says:

    “This is the contemporary New Zealand working class – competing for wages with those in India, China and the juggernaut that is the world’s developing economy workforce. For these folks it’s Auckland or the dole.

    But it’s worse than that. We have a huge distortion in our housing market, a legacy of extremely poor policy management since financial deregulation 30 years ago.

    It has resulted in the price of our accommodation becoming one of the highest in the world – at least in relation to the incomes we earn.

    //
    So with immigrants and investors swarming to Auckland from parts of the world where property speculation is rife, the recipe is set for a party. Apparently Asians are 40 per cent of buyers in Auckland and all buying three or more houses.

    What can the Government do, even if it had the spine to intervene?

    The Reserve Bank’s risk-weighting on mortgages and the politicians’ tax loophole are at the heart of the toxicity homebuyers are facing.”

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10891660

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  9. Chi Hsu (101 comments) says:

    Based on John Key’s populist, Left-wing, be careful not to offend anyone approach to politics, I would not be surprised if he decides to adopt this policy at the next election in order to appease NZ’s economically ignorant “mum and dad” voters, as usual. It certainly won’t be the first, so I highly doubt it will be the last Labour policy this spineless government has sucked up to in order to win votes. Kiwiblog will also be the first to somehow spin the move as a positive step (or call it realistic at worst) given the author’s track record for cheerleading anything the PM does.

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  10. wat dabney (3,756 comments) says:

    Apparently Asians are 40 per cent of buyers in Auckland and all buying three or more houses.

    And leaving them empty? Taking them back to Asia with them?

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  11. maxwell (55 comments) says:

    $18.40 for a 40 hr week gives $38,272 as the starting wage – to which 3% Kiwisaver, say 2% ACC and
    a further 8% leave provision should be added, because if the business is a 52 week a year operation
    when your $18.40 hr worker goes on leave somebody else has to be paid to do their work.

    So if you add, say, 12% to the starting wage you’re at $42, 865, which is a lot for a 16 year old
    starting out in a small owner operated type business.

    And that assumes no money/time spent on supervision/training and that the other workers in the business
    won’t want to be paid more to maintain relativity.

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  12. Liberty (267 comments) says:

    What happens to the thousands of self-employed ,farmers, small business owners
    Who earn less than $18.40. while being forced to pay staff $18.40 because of some Marxist
    Ideologie ?

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  13. Jaffa (94 comments) says:

    Why not $30 per hour, then we will all be rich!

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  14. freemark (580 comments) says:

    So let’s see.. The Labour Party may elect the most insane of 3 hypocritical lying troughers as Leader.. makes sense I guess. I suspect the result of the “vote” will be disregarded when someone realises that none of them are completely female. Meanwhile NZ powers forward, much like ETNZ, and just laughs at the Lefty Sideshow..

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  15. burt (8,269 comments) says:

    The social engineering left…. Taking this country into recession since somebody first convinced enough people that supporting highly paid union leaders on the back of low paid workers was helping workers rights.

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  16. burt (8,269 comments) says:

    Why not $300/hour – then we can all have the Audi’s and the batch plus a gold card with $100,000 to spend on travel.

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  17. Redbaiter (8,823 comments) says:

    People writing here should remember that the National Party supports the minimum wage concept, and recently increased it by 50c.

    All the same arguments apply, but you won’t criticise National. Why is that? (with some exceptions)

    National should have the courage of their convictions and be out there WINNING the public argument on this issue.

    Trouble is they don’t have the conviction. Many of them are left wingers and progressives who believe in this illogical minimum wage concept.

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  18. Michael (909 comments) says:

    I started out in the workforce (back in the late 1980s) on $12k a year – when the median wage was $28k.

    The median wage is now $44k, and Labour is promising the minimum fulltime wage to be $38k.

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  19. Paul Marsden (998 comments) says:

    I own a manufacturing business in the building/construction industry and I pay all my staff $18+/hr. However, business has been very, very tough over the last x 3 years and I’d be lucky to earn $8/hour (jf that), for the 100+ hours I work each week just to stay in business and to hold on to my most valuable asset ie. my staff. Without them, I am nothing. Under Labour’s minimum wage policy (like magic), I’m gonna be earning circa $1800/week for myself. Fantastic! Lets get these idiots into power and the sooner the better.

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  20. Than (473 comments) says:

    @Redbaiter – I support National continuing to support the minimum wage for exactly the same reason I don’t support an $18.40/hr minimum wage. In both cases it is because of the consequences.

    I would like it if everybody could earn more than $18.40/hr. But if the minimum wage goes to $18.40/hr there would be consequences, namely job losses and massive inflation. Similarly I’d like it if National could remove the minimum wage entirely. But if they did there would be consequences, namely they’d be voted out in a landslide and we’d have a Labour/Green government.

    Given two non-ideal options I choose the better of the two, rather than pointlessly complaining that the ideal option isn’t available.

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  21. duggledog (1,556 comments) says:

    ‘Yep. Who is going to hire a 16 year old on a $38,000 a year starting salary?’

    You idiot DPF! It’s no problem – you just print the money!!

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  22. Black with a Vengeance (1,861 comments) says:

    voodoo economics…as opposed to vampire economics in the form of trickle down?

    Maybe if vampire economics did more than widen the inequality gap there wouldn’t be a need to intervene in minimum wage hikes.

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  23. OneTrack (3,093 comments) says:

    Hj – “As Gareth Morgan says:…”

    Well you just shot down your entire argument right there.

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  24. Harriet (4,970 comments) says:

    “……Who is going to hire a 16 year old on a $38,000 a year starting salary?….”

    20yrlds with arts degrees are employed by the government for that. So too are women who answer phones and photocopy stuff without degrees. :cool:

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  25. OneTrack (3,093 comments) says:

    BWAV – remind us again. Is the problem the low wages, or is the problem the “inequality gap” aka the politics of envy? You are jealous that someone gets more money than you so to want to drag them down to the same level ie “equality”.

    And if we were all equally poor ie breadline, would you be happy then? Because all this gnashing of teeth about “mind the gap” tells me it is the latter. And is that is why you are so in favour of a communist nightmare that the Greens would bring?

    Just asking.

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  26. Redbaiter (8,823 comments) says:

    “But if they did there would be consequences, namely they’d be voted out in a landslide and we’d have a Labour/Green government. ”

    This is the excuse of inarticulate compromisers and cowards who do not believe in what they profess to believe in and therefore lack the ability to convince the electorate of what is right.

    Useless surrender monkeys.

    If this is going to be the policy for every idea that confronts communism, then fuck them, they might as well get out of parliament and let us get on with sending the country bankrupt for if what you say is true THERE IS NO ALTERNATIVE.

    If going bankrupt is the only way to get the message through to these bludgers and losers then lets get the fuck on with it.

    Man I detest your attitude and that of all those who likewise advocate such gutless surrender.

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  27. dime (9,972 comments) says:

    Even the mighty Dime couldnt command 38 stacks at age 16

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  28. KapitiCoast (114 comments) says:

    @ HJ…Gareth Morgan! really?…the man who told NZ MSM commentators (that asked him) on his opinion on anything and everything on finance, and the same man who’s Kiwisaver scheme lost for thousands of people, but nz MSM thinks he is the bees knees and he is a tosser!!

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  29. Than (473 comments) says:

    Thank you Redbaiter. I find your inconsistent bile-filled rantings equally detestable, and I am extremely glad that you and your views are an utter irrelevence to NZ politics.

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  30. Viking2 (11,471 comments) says:

    Than (175) Says:
    September 8th, 2013 at 12:59 pm

    @Redbaiter – I support National continuing to support the minimum wage for exactly the same reason I don’t support an $18.40/hr minimum wage. In both cases it is because of the consequences.

    I would like it if everybody could earn more than $18.40/hr. But if the minimum wage goes to $18.40/hr there would be consequences, namely job losses and massive inflation. Similarly I’d like it if National could remove the minimum wage entirely. But if they did there would be consequences, namely they’d be voted out in a landslide and we’d have a Labour/Green government.

    And by the way Reddy is entirely consistent. Like me he despises half educated clowns like you.
    Given two non-ideal options I choose the better of the two, rather than pointlessly complaining that the ideal option isn’t available.

    ================================

    You need to get out more and ask some of those young men which they prefer. Money and a job or scrap heap they are currently dumped on. You are an idiot.
    Why do you thnik there are so many angry young people? Just their hormones is it?

    Young people don’t need that much money to start learning a job abnd employers have to spend money teaching them. Simple equation. dick head.
    Oh no doubt you are a desk cowboy who will soon be worth a lot less than today as the Indians and all take over your job.

    What you can’t figure either is that young people earning contribute to their families by paying mum baorad and save the taxpayer money because they are not on the dole or filling in time at school.

    Fools and their lack of sound knowledge belong in the Labour Party.

    you have no idea what the general public feel about this and if you bothered to ask Mum;s, Dad’s and young people you would get a better knowledge base. Spend sometime away from you TV screen.

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  31. moniquevallom (2 comments) says:

    In reply to this statement, “Why would we say a 16 year old should have the same income as a 40 year old parent with two children” , why would we say that they should not? Discriminating against age is unethical and unneeded in this country and the current minimum age is keeping those who are less privileged, poor. This in turn, is creating extreme inequality in the way New Zealander’s live and something needs to be done to ensure that the gap between the rich and the poor does not get any worse. Instead of bagging on the ideas of those who are aiming to make New Zealand a more equal society, how about you come up with some better ones of your own?

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  32. Paul Marsden (998 comments) says:

    Only business keeps a Government in power that collects a % of the profits they have generated and…. over and above what they have already creamed off the employees of that business (via PAYE). The higher the Government mandates the minmum hourly rate, the higher the tax take.

    Look at it this way….If (in theory), every business in NZ shut their doors tomorrow, Government would cease to exist.

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  33. Pauleastbay (5,035 comments) says:

    Even the mighty Dime couldnt command 38 stacks at age 16

    1977 started at the post Office in wellington aged 17 on $2700 a year. thats $112 gross a fortnight. A bad night at cards at the Island bay softball club and its was a long time until next pay day.

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  34. Paul Marsden (998 comments) says:

    Of course, not to mention the GST revenue that business generates

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  35. valeriusterminus (243 comments) says:

    Paul
    “Only business keeps a Government in power ”
    Yep I’ve read (and chundered) Rees-Mogg, et-al.
    But “Government” and “Business” is about to be redefined.
    If every “labour producing unit” shut their doors tomorrow” – business (as you understand it) would cease to exist in 90 days/
    The “labour producing unit”s will still exist and subsist, their creditors might need to book a haircut – and the government will be looking for a non-Capital g.

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  36. Redbaiter (8,823 comments) says:

    “I am extremely glad that you and your views are an utter irrelevence to NZ politics.”

    Good to know then that you don’t give a damn if I continue to express them as often as I can here and elsewhere.

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  37. Black with a Vengeance (1,861 comments) says:

    It’s about redistribution of wealth OneTrack, not envy. Isn’t that how trickle down is supposed to work ?

    There’s plenty for all if the 1% weren’t so fucking greedy.

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  38. Harriet (4,970 comments) says:

    “…..Isn’t that how trickle down is supposed to work ?….There’s plenty for all if the 1% weren’t so fucking greedy…”

    Why don’t you explain to us then Blackie how trickle up works?

    Here’s a start for ya:

    There’s plenty for all if the beneficieries and the public servants who work for them weren’t so fucken greedy. :cool:

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  39. valeriusterminus (243 comments) says:

    Harriet
    You haven’t addressed the mathematics;
    “The 1%” abuse wealth more than their quantitative value – “the 99%” abuse wealth less than their quantitative value.
    Figuratively that is – give or take 10% of the %’ers.

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  40. moniquevallom (2 comments) says:

    I think it is obvious that those who are receiving welfare aren’t “greedy”. The whole point of living in a society like New Zealand is so we can all help each other in times of need, those who are receiving welfare are doing so because of circumstances which, are a lot of the time, beyond their control. The financial crisis of 2010 being a great contributor to the amount of people who are relying on welfare as a source of income, which was the result of corporate greed. Our government bailed out huge amounts to the companies who put us in this situation, aren’t they the greedy ones?

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  41. itstricky (1,830 comments) says:

    I started out in the workforce (back in the late 1980s) on $12k a year – when the median wage was $28k.
    The median wage is now $44k, and Labour is promising the minimum fulltime wage to be $38k.

    Under a little more scientific application BWAV is completely on the money (so to speak).

    When accounting for inflation only, if the median wage in the 1980’s was $28k, then the median now should be what? (a) $54k, (b) $58k, (c) $70k or (d) all of the above? Whatever way you look at it, it should be much more than $44k. That descrepency is what is in question.

    And, when you take that up $38k all of a sudden sounds like the “correct” minimum wage. Between 20-30 years ago, $38k would probably be a fantastic starting wage. Not now.

    As he says, trickle down is not working.

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  42. itstricky (1,830 comments) says:

    There’s plenty for all if the beneficieries and the public servants who work for them weren’t so fucken greedy.

    A pittance compared to this, I’m sure:

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10887756

    After all, don’t the “rich pricks” remind us of how much more tax they pay than everyone else, -all- -the- -time-

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  43. Pauleastbay (5,035 comments) says:

    istricky When accounting for inflation only

    You cant do it that way though, then there is, working for families, accomodation supplements etc etc etc.

    It would of course be much better if decent wages were paid in NZ but they are not becuase we are taxed to death. ( to pay for working for families, accomodation supplements ) Business ‘s would pay more but the tax burden is crippling

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  44. valeriusterminus (243 comments) says:

    itstricky
    And often their income (abuse on wealth) is a tenuous assertion of their individual value.

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  45. Anthony (796 comments) says:

    Pay rates for skilled workers in demand are good. Virtually no one starts as a fully skilled worker though. Getting onto the bottom rung of the ladder is already difficult enough without the government making it even less attractive to take on new staff! Also, higher rates for workers not in demand discourages those workers from upskilling.

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  46. ChloeHall (5 comments) says:

    I agree with Anthony it is hard enough to get into the work force and the bottom of a career ladder as it is. The fact is new staff won’t be employed with a set minimum wage of $18.40. In reality the already high unemployment rate will continue to increase and young people will begin employment as unpaid interns or on an unpaid trial basis.

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  47. itstricky (1,830 comments) says:

    It would of course be much better if decent wages were paid in NZ but they are not becuase we are taxed to death. ( to pay for working for families, accomodation supplements )

    And why do these exist? Because otherwise, families are not being paid enough to maintain a basic standard of living. Et volia, the ‘minimum wage’.

    Business ‘s would pay more but the tax burden is crippling

    Please do feel free to remind me when the Company Tax rate was last reduced, how that produced an immediate increase in the median salary and how what didn’t happen was an increase in people seeking Government assistance, rather than moving off it.

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  48. itstricky (1,830 comments) says:

    Nothing but thumbs down. Meh. Thought as much.

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