Saturday, March 20, 2010

At a minimum

One issue that the right is adamant about is opposition to raising the minimum wage, and the more extreme demand that it be abolished altogether. It’s one of those economic issues about which reasonable people can have reasonable disagreements. In New Zealand, we may be about to have such a debate.

The issue came up in part because on April 1 the National-led government is adding a paltry 25 cents per hour to the current minimum wage, raising it to $12.75 per hour. But youths aged 16 or 17 classified as "new entrants" have a legal minimum of $10 an hour. Youths’ pay has to go up to at least the adult minimum after they’ve worked 200 hours, or three months, or when the worker turns 18, whichever comes sooner.

In response to all this, the Unite Union is circulating a petition to get a citizen’s initiated referendum onto the ballot to raise the minimum wage to $15 per hour. That would be the first step in a three year plan to raise the minimum wage from the current 50% of the average wage to 66%, what national superannuation for a couple is pegged to. So far, the union has collected more than 150,000 signatures and needs 300,000 signatures by May 7 in order to get the referendum onto the ballot.

While I support a rise in the minimum wage, I don’t know enough about the rest of the union’s proposal to have an opinion. I’m willing to listen to both sides.

However, businesses and conservative politicians oppose any rise in the minimum wage, using arguments that are often simply not true. For example, they argue that rises in the minimum wage cost jobs. Yet studies in New Zealand have not shown that to be true, at least not in good economic times. They also say it makes NZ business less competitive in a global economy. However:

“Statistics NZ data show that 130,000 of the 150,000 people earning between the current $12.50 an hour minimum and $13.10 an hour work in domestic sectors that are not exposed to international competition, such as retailing (49,000), hospitality (29,000) and aged care and community services (11,400). Only 20,000 work in the exposed sectors of manufacturing and agriculture.”

One thing that bothers me the most about the conservatives’ position is that they constantly go on and on and on about making New Zealanders’ incomes more like those of Australians. But the Australian minimum wage is A$14.31—NZ$18.51 and hour, a whopping 45% higher. So: Is the right saying that pay parity is only for the middle and upper classes? Do they think that the working poor should just accept their lot—or move to Australia?

Referendum aside, I hope to see both sides of the debate sticking to facts and not using the silly tactic of citing mere anecdotes to try and make their case. We’ll see.


Roger Owen Green said...

The knee-jerk opposition to the minimum wage in the US has helped created some of the greatest disparity between the working stiff and the corporate honchos.

Arthur (AmeriNZ) said...

Very true. And the knew-jerk opposition here in New Zealand is inspired, more often than not, by rightwing American politicians. Fortunately here there's stronger opposition.