Cunliffe on minimum wage

Stuff reports:

Cunliffe cited US research that shows there is no relationship between a rise and unemployment, saying this was backed by Treasury.

This is simply not the case. David Cunliffe is entirely misrepresenting the research. There is no such research that says there is no relationship between the minimum wage and unemployment. That would be like research which says there is no relationship between gravity and apples hitting the ground.

There is research that says some increases in the minimum wage will not affect employment. That is correct. What matters is what level the minimum wage is compared to the median or average wage, and how big any particular increase is.

Only a moron for example would claim increasing the minimum wage from $14.25 to $25 an hour would not impact employment. Going from $14.25 to $14.75 an hour probably won’t. Going to $18.80 an hour almost definitely would.

Now the NZ minimum wage is already the highest in the OECD compared to the median wage. Significant increases beyond the 66% level it is currently at, are highly highly likely to have an impact on employment.

If David Cunliffe really believed there was no relationship, he would announce a $30 per hour minimum wage, and we would legislate our way to prosperity.

 

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