The New Zealand Herald

Mike’s minimum wage cropper

Setting a bottom price for labour key in civilised society


match tip, wafting up and eating away both bone and flesh.

The reality is, government­s have long been setting a minimum wage, a bottom price for the cost of labour. In a civilised society that seems a pretty basic thing to do. As the MBIE report outlines, “the minimum wage is a well-establishe­d and accepted feature of New Zealand employment law” which has, “for the last 18 years, been incrementa­lly increased by a rate of between 15 cents and $1”.

And while critics highlight the one line in the MBIE report suggesting “a possible negative employment effect (disemploym­ent) of 3000,” they forget to add the officials’ advice that the “current strong labour market is expected to absorb some of this impact”.

Further hedging its bets, MBIE emphasises “the extent to which the minimum wage has an employment effect is heavily debated in economic literature [and] there is no clear consensus . . .”

I do agree that the new minimum

. . . the good old days when the unregulate­d market jungle forced young kids up chimneys to sweep out the soot.

wage of $16.50 an hour is artificial. Artificial­ly low that is. Most observers would agree it doesn’t equate to a realistic Living Wage, one that would cover the true cost of keeping the employee alive and housed.

This is underlined by the $2 billion or so a year taxpayers have to pay out in family assistance and accommodat­ion supplement­s, to enable low-income earners to survive on the inadequate wages Hosking’s market delivers them.

As someone who pays, presumably, a larger tax bill than most of us, it’s surprising he is happy to be subsidisin­g the coffee bar owners’ wage costs in this way.

While employer advocates ritually warn of the dire consequenc­es of being forced to top up the wages of the 160,000 (the current figure) workers at the bottom of the heap, it’s bemusing to see that those at the top manage to find there’s money aplenty to reward themselves.

Last August, the Herald’s annual pay survey of chief executives in the top 50 companies showed an average pay rise of 3.3 per cent for the 2016 year, 12 per cent in the year to 2015 and 10 per cent in 2014.

In the 2016 year alone, the top bosses’ pay rise averaged $56,000, or considerab­ly more than the yearly pay of their employees on the minimum wage. And some were richly rewarded. Although Restaurant Brands doesn’t disclose executive salaries, the highest paid person at the company, generally assumed to be chief executive Russel Creedy, received a 38 per cent pay hike of $280,000, at a time the company was battling its low-paid workers over pay. The good old market really works for some.

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