On Sun, 12 Jan 2020 20:09:35 -0600, Tony <lizandtony at orcon dot net
Post by Tony Post by Rich80105
On Sun, 12 Jan 2020 16:04:33 -0600, Tony <lizandtony at orcon dot net
Post by Tony Post by Crash Post by JohnO
That article, in a roundabout way, says that the prognosis of 43.600
jobs forecast to be created in 2020 will be reduced by between
4000-7500 jobs by the increase in the minimum wage. For the 242,400
wage earners that will receive an increase because of this increase,
he reduction in the projected increase will seem well worthwhile.
When the numbers show up like this, the numbers who benefit by the
increase dwarf the projected cost.
All private-sector employers will always seek to minimise costs -
whether wages or otherwise - and it is inevitable that legislated
minimum-wage increases will be met with the usual cost-containment
measures. The reality though is that those employers relying on
minimum wage rates are those whose profit margins are so thin that
they are forced to do so. I am thinking of those employers who say
that say they cannot find local people to work for them, so seek
ultra-low-cost imported labour through INZ exemptions rather that pay
the locals more.
You are absolutely correct in saying that enforcing a minimum wage on small
employers can and often does make it hard for them to make a profit and
therefore stay in business.
In principle I am in favour of minimum wages but we need to accept there is a
downside. There are some who believe that minimum wages drive higher
productivity; I have never seen any evidence of that and more often than not it
puts pressure on the business, some of which simply go away.
That is why care needs to be taken in increasing the minimum wage. The
current government cannot move it as fast os some supporters want, the
prevous government could not reduce it in real terms as fast as some
of its supporters wanted. Once we have a reasonable level it will be
appropriate to start phasing out the government subsidies for low
wages through "Working for families". At least at this stage thuogh
the additional wages are providing a good stimulus to the domestic
The previous government did not reduce or attempt to reduce the minimum wage so
far as I know. Can you provide evidence?
Not in dollar terms, Tony (althought there was a questions as to
whether the adjustment when GST was increased was adequate), but the
relevant measure is in real terms in relation to the cost of living.
Post by Tony
It is questionable whether this provides any economical stimulus.
By who? It is recognised by most economic commentators that those on
low wages spend almost all that they earn - increasing pay packets for
the poor goes very quickly into higher currency ciculation through
purchased, largely in the domestic markets. That is what provides the
stimulus - the first major increase by the current government saw a
reslting increase in taxation income from teh higher domestic profits
arising from that higher spending; and for many companies higher
turnover gave a reason for empoying more staff as well, so we saw the
unemployment rate fall.
Post by Tony
That is not to say that a minimum wage is a bad idea but I suspect the only
value it has is to reduce hardship.
When Jim Bolger was PM I think it was National Party policy to seek
equality of opportunity as well; that was for a long time a common
aim of successive governments whether Labour or National-led.