$15 minimum wage


It’s nice to see that Labour, now in opposition, is finally around to supporting a $15 an hour minimum wage. The problem (for the Greens as well as Labour) is that $15 an hour, when it was initially proposed, was based on 2/3rds of the average wage.  Years later, and 2/3rds of the average wage is now $17.31.  We need to start talk about 2/3rds of the average wage instead of $15 an hour, otherwise $15 will a Pyrrhic victory.

$15 an hour – sign the petition

Yesterday the Unite Union launched a petition for a Citizens Initiated Referendum on immediately increasing the minimum wage to $15 an hour and eventually increasing it to 66% of the average wage.

Now I’m normally no great fan of Citizens Initiated Referenda – largely because it seems too easy to get leading or misleading questions, like that in Larry Baldock’s silly smacking one, approved.

But Unite’s one to increase the minimum wage is worth supporting. An adult in a full time job should have a reasonable standard of living without getting into debt or relying on charity or income support. $15 an hour – $600 a week – is a good start.

Unlike superannuation or benefits the minimum wage is not automatically increased each year. By making it 66% of the average wage (the same as the married rate for superannuation) it will keep the lowest paid New Zealand workers out of poverty.

If you want to help gather signatures for the petition you can download petition forms here.

Meanwhile, Melissa Lee seems to have made a fool of herself (yet again) at the Unite Union’s candidate forum. Lee quipped “I think I am currently on $2 an hour”.

Actually, she is on $131,000 a year, plus expenses. I doubt workers on the current minimum wage of $26,000 a year (if they work 40 hours a week) would have been very impressed.

The agenda for lower wages

The National Party’s pre-election employment relations policy was notably silent on the issue of the minimum wage. That made some of us who remembered the infamous “nil” minimum wage increases in the 1990s very suspicious.

Over the last couple of days we have seen Sue Bradford at frogblog and Steve Pierson at The Standard speculating, presumably on the basis of some inside information, that the Department of Labour is recommending an increase in the minimum wage of as little as 50c an hour, but that Labour Minister Kate Wilkinson is going even further in recommending to Cabinet a “nil” minimum wage increase.

Then, right on cue, Business New Zealand chimes in this morning with a call for Government to freeze the minimum wage at its current dollar figure.

As Sue Bradford says:

To freeze the minimum wage now is a recipe for further cuts to spending, deeper poverty for the hundreds of thousands of workers and their families directly impacted, and an intensified recessionary spiral.

And it is not just those who sit right on the minimum wage that are affected – it is also all the huge numbers of workers whose low rate of pay, often between the $12 and $15 mark – is determined by the minimum wage rate.

So it seems National may have learned nothing from their disastrous employment relations policies of the 1990s, and that, despite John Key’s talk about reducing the wage gap between Australia and New Zealand, we might be in for another stumble towards an even lower wage economy.

That would be consistent with the other employment relations policies that National have announced or implemented. Just before Christmas we saw them rush their Fire at Will Bill through Parliament under urgency with no Select Committee hearing or opportunity for public submissions. The best way to increase wages is to encourage collective bargaining, but this Bill will do just the opposite. Employers with fewer that 20 employees will be able to dismiss employees for any reason after the start of march. That includes the ability to dismiss employees who join a union. New employees are likely to be coerced into bargaining individually for fear of losing their jobs, which usually means just accepting whatever the employer offers.

And worse is yet to come. Another plank to National’s employment relations policy is this:

Restore workers’ rights to bargain collectively without having to belong to a union.

This is the Employment Contracts Act revisited in all but name – effectively allowing employers to undermine collective bargaining by bargaining separately with a small group of vulnerable non-unionised workers, striking a low wage deal with them, then telling the union they can take it or leave it and locking out the non-unionised workers if they don’t take it.

Maybe John Key wasn’t misquoted after all when he was reported to have told a Kerikeri business audience in late 2007 that he “would love to see wages drop”!

[EDIT: Just picked up on a new post from Steve Pierson at The Standard re Business NZ’s proposal to assist low income workers through tax cuts rather than increasing the minimum wage: He makes some good arguments why this is a silly idea]:

1) tax cuts for minimum wage workers have just been cancelled by National/ACT
2) tax revenue pays for the social wage – healthcare, education etc; tax cuts mean cutting the social wage, or higher debt paid for in the future. If you have to spend your tax cut paying for services that used to be paid for from tax revenue, you’re not any better off.
3) You can’t cut tax year after year to counter inflation, you run out of tax.
4) The tax cuts you would need to make up for not adjusting the minimum wage are massive. You would need to reduce them by 20% to make up for not doing the 50 cent adjustment. That’s even larger than the tax cuts National/ACT cancelled.
5) Finally, if you’re going to cut tax for minimum wage workers you’re going to cut them for all taxpayers, including the very wealthy, at enormous cost (unless you put in a counter-veiling tax rise – yeah right). If the purpose of the minimum wage is to ensure a decent income for workers, then tax cuts are an incredibility inefficient way of doing that.

Stealing Green achievements

Now this really pisses me off! I’ve just noticed Labour stating this on its election site as one of its achievements:

And more than that, we abolished youth rates. After 3 months or 200 hours work 16 and 17-year olds now have the same minimum wage entitlements as anyone else.

The Bill that did this was introduced by Green MP Sue Bradford. And the Green Party had to enlist strong lobbying support from the union movement to get Labour to support it. And when they finally did agree to support the Bill, they did so only on the condition that it was watered down to provide that “new entrants” to the workforce could be paid less than the adult minimum wage until they had worked 200 hours or 3 months.

And now Labour, having had to be dragged screaming and kicking by the union movement to support Sue Bradford’s Bill at all, have the temerity to claim the achievement as theirs!

Will wages drop under National?

Much has been made of the “we would love to see wages drop” comment attributed to John Key.

Misquote, slip of the tongue, or is it the secret National Party employment relations agenda that Key inadvertently revealed to a reporter, as Tane suggests, when addressing a business audience?

Well, let’s look at the National Party policy:

Introduce a 90-day trial period for new employees by agreement between the employer and the employee, for businesses with fewer than 20 staff. During the trial period, either party may terminate the employment relationship for performance, without a personal grievance claim being brought.

Okay, so a small employer will be able to threaten to fire a worker in the first 90 days of employment if he or she joins a union, and the employee will have no personal grievance redress. That policy will have the practical effect of making it almost impossible to unionise small workplaces, with the consequent effect that the wage bargaining power of workers in small business is weakened. A sure recipe for ensuring wages remain low, if not drop.

Restore workers’ rights to bargain collectively without having to belong to a union.

Now this one’s even more worrying in terms of wage levels. This will mean that employers can play off a group of workers in their workplace who are un-unionised against those who are unionised, reach a low-wage settlement with the un-unionised group, and then tell the union the same settlement is available to them on a “take it or leave it” basis, and if they don’t take it lock them out until they do. It will seriously diminish the ability of workers to bargain collectively, and therefore see wages remain low, or even drop.

And there is no mention in the National Party’s policy of continuing even the modest increases in the minimum wage that have occurred over the last 9 years of Labour-led Governments.

So it seems to me that, whatever you make of John Key’s “wages drop” comment, if you want a low wage economy, then a Party Vote for the National Party is the way to go!

Contrast this with Green Party Policy that will see the minimum wage increased to $15 an hour and then tagged to 66% of the average wage, will facilitate multi-employer collective bargaining, and will address freeloading from non-union labour by imposing a bargaining fee of 90% of the relevant union membership fee. The Greens stand for moving to a high wage economy – National will clearly move in the opposite direction.

The minimum wage

Yesterday Steve Pierson at The Standard posted on a rather disturbing comment by National Party MP John Hayes at an election meeting:

A member of the audience asked ‘John, can you please guarantee this audience that a National govt would continue to consistently raise the minimum wage – at least to cover inflation – which the Labour-led govt has done for the past 9 years, in order to support our lowest paid workers?’ According to the report, Hayes tried to avoid the question and waffled about MMP but the questioner insisted on yes/no direct answer. Hayes then snapped ‘No, we believe in tax cuts, not the minimum wage’.

Now that’s a pretty scary response for the thousands of workers who are on the minimum wage at the current princely sum of $12 an hour, and whose gain from National’s (and Labour’s) tax cuts will be minimal. So I went and checked the National Party’s employment relations policy, and there is nothing there at all about the minimum wage at all. So there is every prospect under a National-led government that there will be a repeat of the notorious nil increases in the minimum wage that saw the standard of living of low-income workers seriously eroded in the 1990s.

Even under Labour, unions have had to engage in an intensive lobbying exercise every year to get the meagre increases in the minimum wage that have occurred over the last 9 years. And Labour don’t seem to be proposing anything more than continuing modest increases in the minimum wage.

The Green Party, by contrast, would increase the minimum wage immediately to $15 an hour, and ensure wage security by legislating to ensure there are annual increases that do not permit it to fall below 66% of the average wage.

So for the thousands of New Zealanders on low wages, the answer seems obvious – Party Vote Green!