Valuable tool to fight inequality
You’ve probably already heard the howls. On the left, any call to increase the minimum wage is met with an exhaled howl of relief and educated nodding that higher wages drive increased productivity making awealthier, fairer, more inclusive society for everyone. On the right, the howls are those of indignation and disbelief that anyone could be so distanced from reality. Increased wages make everyone worse off as employers become reluctant to take on new employees and start questioning the ones they do have.
The truth is likely somewhere in the middle. A higher minimum wage will not bring economic doom, but neither will it cure an unequal society. The idea to increase the minimumwage of $18.90 to the living wage of $22.10 an hour is the obvious headline grabber of the recent ‘‘Gains for Everyone’’ report from the Helen Clark Foundation and the New Zealand Institute of Economic Research.
How much we pay our lowest earners always gets people’s attention and the point of the suggestion is arguably to spark discussion.
It is an irony that the politicians, economists, business owners and even media commentators who opine so knowingly on the costs and benefits of paying people more or less have only a distant memory of earning aminimum wage themselves. If we could hear more of the voices of people low wages, wemight understand how a few dollars more an hour can change their lives.
It could mean they sleep more easily, with less anxiety over how they’ll pay their bills. They may start putting cash aside to pursue a hobby, or put it towards retraining for their dream job, or maybe they’ll use it to support a family member in need.
What they do with it is their choice. Some will make bad choices. But you don’t need a research paper to tell you the freedom to make such choices is ameasure of awell functioning society.
A $3.30 hourly increase won’t fix everything. Yet it represents a step forward in the fight against inequality rather than a step back.
On the other hand, there’s no escaping it is significant increase to the price of doing business. At nearly $7000 more a year for a fulltime worker, any increase towards the living wage would need to be well signalled and incremental.
Covid-19 has had a disproportionate impact on Ma¯ori and Pacific Islanders – groups already behind in almost every economic and social indicator – and now the booming property market is entrenching existing wealth. New Zealand as a nation knows from experience there are far more costs than benefits to a society when inequality runs rampant.
Many New Zealanders’ experience of their country is unavoidably unequal. As the ‘‘Gains for Everyone’’ report points out, it takes four generations for those on low incomes to move to average incomes.
That’s comparable with Australia, sure, but still ameasure significantly at odds with the egalitarian ideals that for many of us underpin what it means to be a Kiwi.
In October New Zealanders voted for a new government, overwhelmingly backing a party whose leader has often emphasised kindness and fairness. We can expect that government to use the minimum wage as a tool to address inequality.
It is unlikely the increase will be as steep as $3.30, but progress towards such a goal is a step in the right direction.
Lessons from Liddell
I, like Bob Gregory, am also surprised that a bright New Zealand Rhodes scholar like Chris Liddell works in the White House as a deputy chief of staff to Donald Trump ( Why would a bright and able person work for Trump?, Nov 21).
After watchingQ& A for a second time I ambeginning to understand the reasoning behind this seemly mystifying choice of career. As Jack Tame ascertained, it is not the money that is the great attraction but the desire to make a difference.
There is much to learn from this interview for us New Zealanders. We may not have the big vacuum of middle-class jobs we see in the US, but our current economic model seems to point us in this direction. Our trade with the rest of the world could be a lot smarter unless we are happy being a big farmyard for the rest of the world.
Liddell was not afraid to point out that this comes with a cost. Unless we start
adding value to our exports and kick-start a lot more production, we are facing a grim future.
Marion Lienert, Berhampore
US voters would agree
Recently, the CEO of Te Papa declared nobody could be a true Kiwi if they didn’t embrace Ma¯ori culture.
Bob Gregory seems to have created a similar theme by attempting to stir up national, unconditional opposition to the prospect of Chris Liddell becoming head of the OECD.
There’s nothing new in Gregory’s article. It’s all lifted straight out of the journalists’ textbook of ‘‘Let’s slag off Trump’’.
In predicable fashion, he drags out that well-worn chestnut describing the separation of children and parents at the Mexican border and then, surprise surprise, it’s on to comparisons with Hitler’s cohorts. I don’t suppose Liddell gets compared to Albert Speer very often.
I support Chris Liddell. I can’t see how his appointment could possibly be bad for this country, and I know at least 70 million American voters would agree. Neil D. McCabe, Strathmore towards vanity projects at the expense of spending on the maintenance of core infrastructure.