Fair wages won't make the sky fall in

05:00, Aug 20 2014
 Clare Curran
Labour's Dunedin South MP Clare Curran

Last year, 46 per cent of working New Zealanders didn't get a wage increase. More people didn't get a pay rise last year than in the year before, even though we have been told things have got better.

Of those who did get a pay rise, it averaged 1.6 per cent, about the same as inflation, which means no increase in real terms.

In the same period electricity prices have gone up at least 2.3 per cent, outstripping inflation and, according to the consumer price index, rose by an astronomical 4.2 per cent in the last quarter.

The simple fact is that the lowest wages are not enough to live on. This month, Labour announced that if elected, we will increase the minimum wage by $2 an hour - from the current $14.25 an hour to $15 an hour before Christmas, and then to $16.25 an hour in early 2015.

The government rhetoric that this will somehow result in the sky falling in and people being forced out of jobs is just sheer bunkum. Making sure everyone gets a fair wage is the right thing to do for our families and for the economy, especially in the south.

There is no proven link between gradual minimum wage rises and unemployment. In fact, there will be a Nobel prize for the economist who can prove a link.


Consider this: The previous National Government raised the minimum wage 70c in nine years in the 1990s, while unemployment bounced between 7 and 11 per cent. The previous Labour Government raised the minimum wage $5 in nine years and unemployment fell to the lowest levels in the Western World.

Our proposed increases mean an extra $4000 a year for a fulltime minimum wage worker. We've also set a target of returning the minimum wage to two-thirds of the average wage by the end of our second term.

At the same time as boosting wages and jobs, we will bring in policies to help small firms grow and prosper so they can afford to pay their people more. It's the win- win that Kiwis need.

Labour's economic upgrade policies will cut taxes for businesses that innovate and invest. We will update monetary policy so businesses aren't suffocated by high interest rates and an over-valued dollar. We'll cut power prices for businesses and invest in projects that will unlock economic growth in the regions. Labour will grow the economy and our wages policy will mean the fruits of these policies are shared fairly. It's time we had a central government on the south's side.

Clare Curran is MP for Dunedin South.

The Southland Times