More jobs, please – oh, and can we can get a bigger pay packet, too?

Talk about wanting a bob each way (preferably without having to work for it).

The trade unions that have been hollering for a hefty hike in the minimum wage are now demanding the Government create new jobs.

Labour similarly wants a higher minimum wage and more jobs.

The pressure for more jobs followed the disappointing news that the unemployment rate had risen to 7.3% in the December quarter.

As Stuff reports –

Unions are demanding the Government act immediately to create new jobs as the unemployment rate blows out to 7.3 per cent, the highest in 10 years.

The number of jobseekers jumped by 18,000 in the last three months of 2009 – double the Labour Department forecast.

Prime Minister John Key said yesterday it was not a time to despair, but Council of Trade Unions president Helen Kelly said it was time to act, with 168,000 people out of work.

“It raises real fears that, with unemployment still rising, we will see a peak well above 7.5 per cent and unemployment lingering on at high levels for several years,” she said.

This was a load of posturing clap-trap.

Let’s put things in perspective.

Economists said the headline unemployment rate made the jobless situation look worse than it actually was, and the worst was over.

Bank of New Zealand’s Stephen Toplis said the fact that only 2000 people lost their jobs in the last three months of 2009 showed the economy was turning the corner. That compared to an average of 17,000 being put out of work every quarter for the previous nine months.

He expected unemployment to peak at 7.4 per cent about June.

Not so long ago, the bloody unions were banging on about the minimum wage.

The increase in the minimum wage of just 25c to $12.75 per hour is mean, said Council of Trade Unions President Helen Kelly today. “If this is the rate at which we intend to catch up with Australian wages then we will never get there,” she said.

“The increase to $12.75 from 1 April is an annual increase of only 2 per cent. That is barely enough to compensate for inflation, and may not be enough even for that.”

She made much of the NZIER consensus inflation forecast of 2.3 per cent for the year to March 2010, whereas the average wage rose 2.8 per cent in the six months to September 2009 alone.

“The NZIER consensus forecast for the increase in private sector wages to March 2010 is 3.5 per cent. If this turns out to be correct, the minimum wage will actually fall as a percentage of the average wage. This means low paid workers are going backwards not forwards.”

Kelly also reckoned higher wages to low paid workers would stimulate the economy.

“It is untrue that increases in the minimum wage cost jobs. Much higher increases in the minimum wage in recent years have occurred while employment was maintained at record high levels.”

The CTU believes the minimum wage should be two thirds of the average wage and as an interim step should immediately rise to $15.

Labour does, too.

Labour’s spokesman on labour issues the stroppy Trevor Mallard, recently seized on a survey that showed strong public support for the Government to lift the minimum wage to $15 an hour.

Commenting on the data (six out of 10 of the 2300 people surveyed said the minimum hourly wage should increase from $12.50 to $15), Mallard said –

“It is heartening to see that most New Zealanders recognise the struggles faced by those on the minimum wage and support a better standard of living for them,” Trevor Mallard said.

“Lifting pay rates also spurs employers to invest more in training, technology and plant, which raises productivity.

Mallard further said the Government should listen to what the public is telling it and do more to improve families’ lives while also raising productivity levels.

But let’s check out what Kiwiblog had to report on the issue.

In opposition you can propose all sorts of things, without having to worry about the consequences. We see this today with Trevor Mallard’s private members bill to have the minimum wage go from $12.50 to $15.00 in just two years.

Increases in the minimum wage can destroy jobs. Not automatically in every situation, but certainly in many situations. If this was not the case the minimum wage would be $50 an hour.

With the abolishment of the youth minimum wage, I have no doubt that the record high youth unemployment is partially because some young workers have already been priced out of the market.

On the other hand the economy had strong enough economic growth for most of the 2000s that the minimum wage was increased without a significant impact on employment.

David Farrer than examined Labour’s record vs its rhetoric.

In Labour’s first term, they had a booming economy (inherited from the previous Government). How much did they increase the minimum wage by? Their annual increase were 55c, 15c and 30c.

An average of 33c, compared with National’s increases of 50c and 25c despite the recession.

Is anyone stupid enough to think that if Labour was in Government they would be increasing the minimum wage to $15?

In fact we know this from their own election policy. All their policy said was that they would increase it to keep pace with (the greater of) inflation or average wage increases. Now as neither inflation or the average wage is at 10%, it shows how hypocritical Labour is being – now promising something they know would be bad for jobs, purely because they know they don’t have to deliver on it. If they really thought it was a good idea they would have promised it at the last election.

But they are in opposition now and can make all sorts of demands without having to mop up the mess.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: