Another blow for small businesses

employment growth over the first half of 2021, last week’s minimum wage increase shouldn’t have happened.

It should instead have been staggered.

MBIE says an increase to the minimum wage should have been held off until October 1 rather than April 1, and be $19.15 an hour instead of $20.

The advice says: “MBIE believes the current economic conditions suggest a more gradual increase in the minimum wage is appropriate in 2021.

An increase in the minimum wage in April 2021 would be unaffordable for some businesses.

This risks increasing unemployment or under-utilisation for low-paid employees, particularly those people on or near the current minimum wage.”

And it gets worse, because charging ahead as planned will hurt those Labour spends so much time claiming to stand up for - Ma¯ ori, Pacific peoples and low-skilled workers. According to MBIE, “These groups are also more likely to be the first to experience negative employment effects resulting from minimum wage increases, such as reduced hours or job loss.”

Labour likes to make bold changes to the labour market because it claims to be standing up for the little guy, but it doesn’t understand the reality of running a business, and that there’s only so much stress you can put on a market before it reacts in a way that hurts those you’re trying to help.

Just watch - these extra charges will be more than many businesses can stand, delivering stagnant or declining productivity at best and widespread business failure and job losses at worst.