The new living wage!

February 18th, 2014 at 12:00 pm by David Farrar

Rev Waldegrave has waved his wand and come up with a new living wage of $18.80 an hour. This means that David Cunliffe, Len Brown and Celia Wade-Brown must all implement this new wage because they have promised to ensure all government staff in their sector get paid whatever Waldegrave says they should get paid.

The stupidity of their pledges is highlighted by what Waldegrave has done. You see he has not done a full recalculation of the . He has just increased it by 2.1% because that is how much market wages have gone up. But that is a bastardisation of his own process, as his calcualtion is meant to be based on how much you need to spend – not how much other wages have gone up.

So why has Rev Waldegrave done this? What would be the living wage if he had just recalculated it based on the latest data using the methodology he used to calculate the original living wage? Well it would be a staggering $22.89 an hour. They obviously realised that figure would get them laughed out of town, so they decided to pick another figure out of thin air.

So the true living wage figure is now $22.89 an hour. Waldegrave has gone for a more acceptable figure because this is about politics, not any form of impartial calculation.

So my question to David Cunliffe, Len Brown and Celia Wade-Brown is which living wage figure are they promising to pay all government staff and contractors?

Is the $22.89 figure that it should be, based on the original living Wage methodology they signed up for. Or is it the $18.80 figure, which means that they don’t care about what the actual living age is – they will just insist all staff be paid whatever figure Rev Waldegrave determines is correct every year?

Go read the report. It makes very clear that the formula they used for the living wage last year, would produce a living wage of $22.89 if applied this year. They’be basically dumped that formula because it is so ridiculous. But that is the formula Cunliffe, Brown and Wade-brown signed up to.

So the left are effectively saying it should be illegal for a 16 year old school leave, living at home, who works in the government sector to be paid less than $46,000 a year.

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40 Responses to “The new living wage!”

  1. igm (1,413 comments) says:

    Interesting, how these losers who contribute nothing, make these claims. They have never produced, worked, or achieved a damn thing in their leeching lives, yet they tell us what we, as employers, taxpayers, or ratepayers, should be paying staff. Crawl into your cave religious man, your views, like your fiscal skills are crap.

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  2. RRM (9,597 comments) says:

    So the left are effectively saying it should be illegal for a 16 year old school leave, living at home, who works in the government sector to be paid less than $46,000 a year.

    But I’ve got a BA in Medieval literature! I’m TOTALLY worth more than that!!

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  3. Manolo (13,514 comments) says:

    Reverend Waldegrave? Therein, in his absurd title, lies the problem.

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  4. Psycho Milt (2,337 comments) says:

    So the left are effectively saying it should be illegal for a 16 year old school leave, living at home, who works in the government sector to be paid less than $46,000 a year.

    This would be true if “the left” were demanding that the minimum wage be made $18.80 a year. So, it’s not true.

    [DPF: I said the government sector, and that is exactly what the left are demanding]

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  5. dime (9,607 comments) says:

    lmao don’t be coming here with all your facts and reasoning DPF! The Reverend has spoken!

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  6. Bovver (148 comments) says:

    I wish I was 16 again so I could be on the living wage,”the problem with socialism is that you eventually run out of other people’s money” – Maggie Thatcher

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  7. James Stephenson (2,076 comments) says:

    … take away the number you first thought of, divide by the fiddler’s constant and the answer is…?

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  8. Rich Prick (1,599 comments) says:

    Yes, when the good Reverend was totting up the cost of SkyTV, smartphones and so on, he forgot to add in the weekly repayments on the Mercedes-Benz. Lets hope he didn’t forget the annual European holiday, the accountants hate having to reforecast wage budgets.

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  9. gravedodger (1,526 comments) says:

    What a f&*king misery guts you are Charlie, make it a nice round $50 and show some compassion, bloody tosser.

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  10. Sponge (152 comments) says:

    This meddling parson should stick to talking to sky fairies and steer well clear of economics.

    What a dick

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  11. dime (9,607 comments) says:

    is the occasional rub n tug factored into the living wage?

    hookers shouldnt just be play things of the rich..

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  12. J Mex (184 comments) says:

    You missed this one DPF…

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11204296

    Unions and community groups have begun to put their money where their mouths are in the campaign for a living wage – literally, in the case of former Cabinet minister Laila Harre, who now co-owns an upmarket Auckland restaurant.

    Interesting. She puts her money where her mouth is. Oh… wait…

    Four of the six staff earn over $18.80 an hour, with only [2] below it.

    Ah, so 2/3 staff get a living wage.

    Ms Harre’s restaurant, O’Sarracino in Mt Eden Rd, hosted the announcement of the accreditation system yesterday but still pays two employees below $18.40. Another director of the business, Maurizio Piglia, said those two would be paid the new $18.80 rate by June or July “if the business environment supports us”.

    The 11 employers accredited so far include only one profit-making business, a tiny Titirangi photo printing firm called Opticmix run by partners Kevin Church and Diana Yukich, with one employee who had been below $18.40 before the living wage campaign started last year.

    “If a business can’t afford to pay the living wage, really it is questionable how valid the business is to run,” Mr Church said.”

    About as valid as saying, “If a business can’t employ more than one person, it’s not really a valid business” (i.e. Not a valid statement).

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  13. georgebolwing (652 comments) says:

    I love the pretence that the Living Wage is now a “market wage”, not an instrument of social policy, and so it is OK to adjust it by way of the movement in average wages.

    Can anyoe point to a private sector employer in a competative market who was agreed to pay all their employees, regardless of skills, effort or attitude, the living wage as part of a market-determined process? As far as I can tell, the only people who are agreeing to pay this wage are those who have the coersive powers of the state at their disposal to secure the income needed to pay this wage.

    I also love the irony that one of the reasons that the correctly calculated living wage has had to go up by so much is becuase it is so high that people receiving it would have their childcare subsidies abated away.

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  14. igm (1,413 comments) says:

    Wait until they start explaining what their taxation policy on turnover is? Businesses won’t be employing anyone, as they won’t be able to afford them. If these drones ever get into power this country will have unemployment and bankruptcies of unbelievable proportions. Where will the envious get their benefits from?

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  15. J Mex (184 comments) says:

    Without wanting to get creepy, stalky (or down on businesses or entrepreneurs), it looks like the one profitable accredited business is a Mum and Dad operation which they run out of their home, with one part-time family member.

    Thanks, but I’ll take my lectures on “running a valid business” from elsewhere, thanks.

    opticmix is a small family-based business, Kevin manages printing and production, Diana manages finances and administration. We have one part-time employee who is also a family member and we support the Living Wage Aotearoa NZ Movement as being an important aspect of living in a fair society.

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  16. NoCash (256 comments) says:

    -Blue Steel mode on-
    I want to implement a wage for the people who can’t live good, I shall call it the “Living Good Wage”. :-)
    -Blue Steel mode off-

    Seriously though… are Helen Kelly, Matt McCarten, and co paying their cleaners, tea ladies $40k a year?

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  17. igm (1,413 comments) says:

    NoCash: Kelly and NcCarten are too busy leeching union fees living the “good life” to worry about staff living wage! McCarten does not even pay tax . . . yet he berates anyone with a family trust, even “Tojo”.

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  18. srylands (390 comments) says:

    “…this country will have unemployment and bankruptcies of unbelievable proportions. Where will the envious get their benefits from?”

    I asked that at The Standard. The answer:

    srylands:

    “What happens when the wealth leaves the country as a result? Or are you going to stop people leaving at the border and force them to stay and pay up?”

    Answer:

    “Let it go; more currency can always be issued.”

    http://thestandard.org.nz/labours-new-housing-policy-shearer-on-qa/#comment-670016

    So there is your answer. We just issue more currency. Do you feel better?

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  19. Psycho Milt (2,337 comments) says:

    [DPF: I said the government sector, and that is exactly what the left are demanding]

    There are two things here:

    1. Given that the living wage was published as a wage suitable for a family of four to live comfortably on, not a minimum wage, it is indeed silly that some on the left are treating it as a de facto minimum wage. However, it’s no sillier than you constantly writing criticisms of the living wage that are all variations on pointing out that the living wage is higher than a minimum wage would need to be.

    2. Successive governments have worked hard to help employers keep wages as low as possible, to such a ludicrous extent that the government now has to top up wages with welfare payments. With the unions successfully destroyed, it’s hardly surprising that the left is looking to the public sector as a means of applying upwards pressure on wages.

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  20. srylands (390 comments) says:

    “Given that the living wage was published as a wage suitable for a family of four to live comfortably on, not a minimum wage, it is indeed silly that some on the left are treating it as a de facto minimum wage. ”

    So to get this straight, you are advocating that employers pay higher wages to people based on their personal circumstances? For example, we have two people working at McDonalds doing essentialy the same job. You are suggesting that the 18 year old without children gets $14 per hour, and the 30 year old person with two kids should get $18.80 per hour BECAUSE they have two kids?

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  21. flipper (3,753 comments) says:

    Manolo (12,202 comments) says:

    February 18th, 2014 at 12:09 pm

    Reverend Waldegrave?
    **********

    Charlie Waldegrave….

    The dickhead pastor endowed by Bruce Judge with Renouf Corp and Judge Corp shares before they went belly up big time in ’86/87
    .
    Bruce complied with the pressure exerted by his then spouse, and made Waldegrave wealthy. Ergo, Waldegrave has been one of independent means for the past 28 years.

    It is easy to spend others hard-earned capital.

    Arsehole.

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  22. Psycho Milt (2,337 comments) says:

    So to get this straight, you are advocating that employers pay higher wages to people based on their personal circumstances?

    Well, no, and it’s beyond me how you could infer that from it. I wasn’t advocating something, I was pointing out the foolishness of treating Waldegrave’s living wage recommendation as a minimum wage recommendation, which DPF is as guilty of as these leftists he’s going on about.

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  23. Psycho Milt (2,337 comments) says:

    It is easy to spend others hard-earned capital.

    Arsehole.

    Yes, yes, but enough about Bruce Judge – what was your point about Waldegrave?

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  24. srylands (390 comments) says:

    “Well, no, and it’s beyond me how you could infer that from it. I wasn’t advocating something,..I was pointing out the foolishness of treating Waldegrave’s living wage recommendation as a minimum wage recommendation”

    Well tell me how you would implement the policy. Because if DPF is wrong, I assume you are suggesting that the LW will only be paid to a subset of “deserving” employees. So lets stick with McDonalds. How would you want them to implement a living wage policy in their stores? Because I have no idea how it will work if it is NOT a new minimum wage. Please enlighten me.

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  25. Fletch (6,094 comments) says:

    A good article out today on how a “living wage” actually ends up hurting the poor.
    It points out that government interference in the free market raises prices and that minimum wage jobs are really supposed to be temporary or stepping stones — not lifetime careers.

    [...] it’s important to note the following: those on the left focus on the wage aspect of the poverty issue in America, but never seem to focus on the other end of the spectrum – prices. More dollars chasing goods and services raises prices. This is basic economics.

    http://www.pocketfullofliberty.com/living-wage/

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  26. Psycho Milt (2,337 comments) says:

    No idea? Just give it a bit of thought.

    If you’re an employer who isn’t devoted to screwing your employees for every penny you can get, and you decide to implement a living wage policy, you have a bit of a look at it, don’t you? And you find that the minimum wage you can possibly pay someone is $13.75 (I think), and what someone with a couple of kids would need to live on is $18.40.

    That’s a hefty difference, so the first plank of your living wage policy would be to not pay people the absolute minimum you’re legally allowed to pay them, but start them somewhere above that.

    You then look at how someone who’s worked for you for years and started a family, or hasn’t started a family but has worked for you for years and ought to be seeing something for it, is going to live comfortably on what you’re paying, and introduce some increments based on experience.

    So your ‘living wage policy’ may end up being something like ‘starting wage at least 80% of declared living wage, living wage obtainable within four years assuming satisfactory performance’ or something along those lines. It doesn’t have to be the ‘de facto minimum wage’ version being peddled around local governments.

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  27. Psycho Milt (2,337 comments) says:

    A good article out today on how a “living wage” actually ends up hurting the poor.

    Just like all the speeches about how a 40-hour week will hurt the poor, sick leave will hurt the poor, and repeat for pretty much every advancement in working conditions for the last 200 years.

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  28. srylands (390 comments) says:

    Mr Milt

    Thanks for that reply. Rational employers will lift the wages of people as they become more experienced because they have more to offer.

    How is what you are describing different to what happens now? For example, I know very well a young person. She is 22. She has been working part time as a receptionist at a Vet Clinic since she was 15. She started on MW. She is now getting $20 per hour. Why do you think that is? Not because the employer is nice but because she is brilliant at her job and can now do a variety of tasks. The employer does not want to lose her.

    So let me speculate on what I THINK might be your vision and motivation for a Living Wage. What I think you are suggesting is that (lets use Maccers again) an employer should pay a burger flipper a higher wage after 4 years even if that person is no more productive than DAY 1, and has not made any effort to acquire new skills because they are “deserving”, or even better – they have a family. That is where we part company.

    If the person is still a burger flipper after 4 years, they will still be getting $13.75 per hour. That is as it should be. BUT for most people, they do not stay on the MW. They move on up because the market makes that happen. If someone is 40 years old and they are still on the MW then there are good reasons for that. They have low intelligence, no skills, no motivation, a mental of physical disability, or all of the above. That is harsh, but the truth.

    For those – small – numbers of people, it is the role of the Government via the tax system and the welfare system – to top up their income. – NOT employers. Society will be more prosperous if employers can use wages to distinguish between the productive and unproductive as they see fit.

    But thanks for your reply. I do have some insight into why you think a living wage is necessary. I just do not see the need for it.

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  29. edhunter (507 comments) says:

    Probably as relevant as the good Rev but what went up to explain a 25% increase in just one year?

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  30. OneTrack (2,741 comments) says:

    Psycho – “So your ‘living wage policy’ may end up being something like ‘starting wage at least 80% of declared living wage, living wage obtainable within four years assuming satisfactory performance’ or something along those lines. It doesn’t have to be the ‘de facto minimum wage’ version being peddled around local governments.”

    The problem is we are talking the “Living Wage” campaign as currently promoted by the left at large, including the Labour and Green parties. You can discuss what it “should” be, but that is not what the ” policy” is. Hence, DPF’s disparaging comments are fully justified. The left ARE promoting that a 16 year old school leaver, hired to clean up the workshop at the City Council workshop, MUST be paid $46,000 per annum. And they are promoting that all private sector employers should do the same thing, and “If they cant afford it, then they shouldn’t be in business”. The arrogance of the left is mind boggling.

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  31. Psycho Milt (2,337 comments) says:

    How is what you are describing different to what happens now?

    What happens now is as you describe it: employers feel that unskilled labour is worth whatever the legal minimum they can get away with paying, and even if several years later the now-highly-experienced unskilled labourer is the mainstay of their unskilled staff they’re still worth exactly whatever the legal minimum is, unless they’ve proven exceptional in some way. That’s a big difference from what I’m describing.

    What I think you are suggesting is that (lets use Maccers again) an employer should pay a burger flipper a higher wage after 4 years even if that person is no more productive than DAY 1, and has not made any effort to acquire new skills because they are “deserving”, or even better – they have a family.

    No. First off, fuck productivity. Workers haven’t seen increased productivity reflected in their wages for decades, so why would they be interested in it as a criterion for wage increases? Second, I really don’t care whether the person has a family or not – after several years in the job their experience will make them worth a lot more to you than a school leaver, if you’re capable of dealing honestly with your staff. Either that or they’re useless and you’ll probably have found some way of moving them on.

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  32. Psycho Milt (2,337 comments) says:

    The problem is we are talking the “Living Wage” campaign as currently promoted by the left at large, including the Labour and Green parties. You can discuss what it “should” be, but that is not what the ” policy” is.

    As I said further up, the left’s looking at using the public sector as a means of putting upward pressure on wages, after decades of government efforts at creating a low-wage economy proving so successful that the government has to top up wages with welfare payments. It’s not how I’d do it, but I doubt they give a shit about that. If you don’t like it, don’t vote for governments that work hard to keep wages low – then it wouldn’t be an issue.

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  33. OneTrack (2,741 comments) says:

    Psycho – I assume you mean National, but I am not sure which of their policies “work hard to keep wages low”. Yes, you could vote Red, but, then, I suspect many of the jobs will then cease to exist at all, especially with the train wreck that Labour is and the anti-modern world view of the communists.

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  34. srylands (390 comments) says:

    “after several years in the job their experience will make them worth a lot more to you than a school leaver”

    Right. Which is why such people get paid way more than school leavers.

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  35. deadrightkev (316 comments) says:

    The best minimum wage is $0.

    It gives everyone the same opportunity to get ahead and increases the likelihood of a kids getting a start so they can advance, no one subsidises unproductive losers on the payroll.

    National in their rush to head off Labour on the left still haven’t understood the fundamentals.

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  36. hemihua (31 comments) says:

    “If you’re an employer who isn’t devoted to screwing your employees for every penny you can get, and you decide to implement a living wage policy, you have a bit of a look at it, don’t you? And you find that the minimum wage you can possibly pay someone is $13.75 (I think), and what someone with a couple of kids would need to live on is $18.40.”

    You infer that the majority of employers are ‘screwing’ their employees. I think you’ll find the majority are doing quite the opposite. If forced to raise wages then the business goes under (because the employer needs to make a living too, plus a return on capital, otherwise might as well stash it in the bank) then your employees are now unemployed (I suppose your solution is the government prints money for them…).

    Some argue that paying the living wage will improve the economy as people have more to spend. Sure it will, temporarily, until prices rise to meet the new demand (inflation). Economics is all about scarcity after all. There is no free lunch. You’d do well to put away the Marx and read a bit of Mises.

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  37. Psycho Milt (2,337 comments) says:

    Right. Which is why such people get paid way more than school leavers.

    In which case, employers wouldn’t face any significant changes from implementing a living wage policy so there’s no need to make a fuss about it.

    You infer that the majority of employers are ‘screwing’ their employees. I think you’ll find the majority are doing quite the opposite.

    Yeah, the great majority always focus on ensuring the best possible pay and conditions for their workers, and the shareholders can go fuck themselves, right? I just somehow have always been employed by one of the minority of employers, I guess.

    If forced to raise wages then the business goes under (because the employer needs to make a living too, plus a return on capital, otherwise might as well stash it in the bank) then your employees are now unemployed (I suppose your solution is the government prints money for them…).

    Employers are only ever ‘forced’ to raise wages, there is no other kind of wage rise that turns up. The force may be applied by workers acting collectively or skills shortages, rather than legislation, but there are only ever ‘forced’ wage rises. And yet, 300 years of ‘forced’ wage rises later, businesses are still around and we aren’t all unemployed. ‘Wage rises will increase unemployment’ is an argument that can only be applied in specific terms (ie, in relation to a particular amount or a particular business).

    You’d do well to put away the Marx and read a bit of Mises.

    People reading Marx gave us a working class that can afford a bit of self-respect. People reading Mises gives us a lumpenproletariat. If you’re an employee, which one makes more sense?

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  38. flipper (3,753 comments) says:

    1. P/Shrink…nutter…. asks what the point is about Charlie Waldegrave. The point is that he was made wealthy by Judgey having been endowed with paper wealth that he sold for real earned or borrowed money. Waldegrave is a chardonnay socialist who has remained wealthy while arguing that others should pay more in tax to fund his outlandish claims. Sky ? Holidays? All part of basic living costs? Crap.

    AND then there is the REAL cost of the waldegrave/St John formula.

    The near $23 (22.89) is the start point. Add holidays (8%), sick leave (2%), ACC costs (min 1%), wage creep for relativity, and that $23 very quickly becomes %26 real, actual dollars.

    Get real P/shrink nutter ….find solace in Karl. He lived in a world far different from 2014 New Zealand. The fact that you think the worlds of Marx and NZ 2014 are similar, and that his flawed theories should be revived here, is indicative that you have, really, escaped from the Mason Clinic.

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  39. Psycho Milt (2,337 comments) says:

    It doesn’t surprise me that you imagine Waldegrave’s personal finances have some relevance to his arguments about a living wage – it’s on a par with your usual inability to recognise what constitutes an argument and what doesn’t.

    Re Marx, his ideas were made largely irrelevant in western democracies by the activities of generations of socialists, who successfully turned capitalism into something other than Marx described. What I find amusing is that it’s actually people like yourself who’d like to see his ideas revived here, through your efforts to return capitalism to the way Marx described it. For a fine example, look at Mr “minimum wage should be $0″ further up the thread.

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  40. srylands (390 comments) says:

    Having read your posts carefully, I am still hazy on what a living wage actually is. If it is not a new de jure or de facto minimum wage, it (according to you) seems to be some kind of unenforceable social compact applied to a subset of employees and/or employers. In that case, employers who sign up to it are likely to do so for PR reasons and in the knowledge that nothing for them will really change.

    My last word on this is about this, which is telling:

    “Employers are only ever ‘forced’ to raise wages, there is no other kind of wage rise that turns up.”

    This is a common belief of the left that in a market transaction there must be a winner and a loser. So the employer “loses” by being forced to raise wages or the employee loses by being screwed over by nasty employers.

    Of course the world is not like that. Labour markets, like other markets, generally deliver results where both parties win.

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