Low-wage economy doubt

I am a believer in the adage “someone, some day, has to pay the bills”.

I am also aware some people struggle to make ends meet and have no intention of asking why, but I am pretty certain just throwing money at an issue rarely resolves it.

Are we a low-wage economy? Minimum hourly wages (in NZ dollars) in Germany are $15.38, France $15.78, UK $13.65, US $12.61, and so I find it hard to believe NZ is a low-wage economy or can justify a minimum wage of $16+ let alone $20 as promised.

There is little doubt the Government is the overall winner. Treasury will immediately regain the income tax as PAYE and also the GST, so the employee’s net gain is minimal.

As soon as an unskilled worker is paid more, all employers are bound to increase the remuneration of their experienced staff in order to maintain that vital margin for skill. This overall increase will inflate the price of everything employing labour and any benefit from wage increases will rapidly diminish.

Much better, surely, to reduce the GST on a limited range of food items which would instantly offer the low paid worker a net benefit, but retain that vital skill advantage. Robert Burrow, Taupo.