Greens wages policy

The policy is here. Some extracts:

As a first step to restore workplace fairness, the Green Party will increase the to $15 immediately, in December 2014. We will then raise it in $1 steps on April 1st each year, so that it reaches $16 on April 1 2015, $17 on April 1 2016, and $18 on April 1 2017.

They also want to abolish the starting off wage, so they want to make it illegal to hire a 16 year old for less than $18 an hour!

The minimum wage in NZ is very high compared to the median wage. It is set at 66%. This policy would see it go to close to 85% (less any increase in median wages by 2017). The Department of Labour estimates this policy would see 24,000 lose their jobs, and go onto welfare.

Treasury have said that the minimum wage in New Zealand is the highest in the OECD compared to the average wage (at 49%) and third highest compared to the median wage.

National has increased the minimum wage by 19% in six years. Combined with tax cuts, the after tax income of someone on the minimum wage has gone up 27%. Adjusted for inflation a minimum wage worker has had a real income boost of 11%.

There is no case for the massive increases in the minimum wage, proposed by the Greens. We already have almost the highest in the world compared to median and average wages.

The Green Party also supports the Movement, which has established that a typical family needs a wage of $18.80 to buy the
basics and participate in society. In order to lead by example, the Green Party will pay the Living Wage to all core public service staff,
and require all relevant Government contractors to pay a Living Wage when their contracts come up for renewal.

This will mean a de facto $18.40 minimum wage for most of NZ. There are very few companies that don’t have a government agency as a client. If you run a photocopier business, and supply services to a government agency, then you’ll have to pay the 16 year old intern $18.40 an hour!

As another major step towards a more stable and secure future for workers, we will implement recommendations from business, Government and unions for a statutory minimum redundancy payment for all staff equivalent to four weeks’ pay

And as part of this:

These changes will give workers more stability, and discourage unnecessary restructuring. In the case of large-scale redundancies, we will also fund union delegates to work with staff for 3-6 months to support them through the transition

This is the real policy – to have taxpayers fund unions.

We will also incorporate pay ratios into Government procurement policies.

So the Greens in Government will ban companies from gaining Government contracts, even if they are the cheapest and best provider, if they think their CEOs are paid too much!!!

The Green Party will work with the Union movement to see how the terms and conditions of unionised workers can be extended to others in their industries, whether through the Council of Trade Unions’ Extension Bargaining model or other policies

De facto compulsory unionism to return!! Joy. And hey by coincidence those unions are major donors to parties on the left.

To tackle the unacceptable face of precarious work, the Green Party will introduce laws banning zero-hours agreements, as part of greater
regulation of hours of work.

This is insane. This means a company would have to pay casual staff, even when there is no actual work to do.

Increasing the minimum wage will cost $1.1 billion over three years, owing to higher Government staffing costs, especially in the health
sector. However, that will be offset by increased tax revenue from wages of $1.9 billion over three years.

This is economic failure of the highest kind. They are counting the extra tax from higher wages, yet have ignored the fact companies paying those higher wages will have smaller profits and pay less tax. And low paid workers pay tax at around 15% and companies at 28% so here’s the actual cost of this policy:

  • $1.1 billion in higher government staff costs
  • Extra PAYE tax from higher wages -$1.9 billion
  • Less company tax from lower profits – $3.5 billion

So the actual fiscal impact of this policy would be $2.7 billion, not the claimed $800 million savings.

Now think about the economic incompetence of a party that doesn’t realise that profits fall if wages increase. And think about how massive that deficit will be if these people are making economic decisions in a Cabinet!

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