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It's Time To Raise The Minimum Wage!

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Contributor:
Chris Ford
Chris Ford

Today is Labour Day and what better way to celebrate than to call for the raising of the minimum wage to $15 per hour!

The Unite union (headed by Matt McCarten) is spearheading the campaign for a citizens initiated referendum on whether to raise the minimum wage to that figure. After all, we are behind the Aussies when it comes to this in that their wage starts at $A17.50 per hour.

And why, might you ask?

Well, the former Employment Contracts Act of 1991 largely inhibited workers in their right to elect collective bargaining through multi-employer awards as had been the case previously. This single move drove down wages, particularly for low income workers.

Furthermore, the Bolger-Shipley National Government froze the minimum wage at $7.50 per hour during the 1990s and while Labour had raised it to $12.50 an hour by 2008, our lowest paid workers were still not being compensated for the loss of real incomes that they had sustained during the previous decade.

Well, now it's catch up time and if the National Government is serious (alongside their Act friends) in raising our living standards and incomes to those of the Aussies, then what better place to start than with the minimum wage! If you raise minimum wage rates, you will instantly improve the pay packets of thousands of low paid Kiwi workers. While $15 an hour might not seem a royal sum, it will help lift the living conditions of vulnerable workers and would provide a good start on the road to lifting them even further. It would also have a positive economic spin-off in that beneficiaries and low-paid workers tend to spend and not save their money, so retailers, particularly in lower socioeconomic communities, will benefit.

However, business and employer groups (backed up by the likes of the Business Roundtable) will undoubtedly, in any future referendum campaign, provide fallacious arguments about the reasons why the minimum wage should not be lifted. For one, they will argue that this will raise business costs, particularly at a time when we are emerging from recession, and that this could impact on the ability of employers to hire new staff.

This argument does not stand up to the facts in that between 2000 and 2004, for example, profits increased 11% year on year while the average worker only got an increase of 1.7% in the years from 1995-2005 according to Reserve Bank figures. Admittedly, profit margins might not be great right now but they are showing signs of recovery and one of the first groups to benefit shouldn't just be the bosses but long suffering workers who have sacrificed so much in this recession.

In terms of wage rises impacting on unemployment, this is also dubious given that there is no proven link between unemployment and wage increases according to Treasury research (and that organisation has never been the worker's friend, anyway!) In fact, as I alluded to earlier, wage rises do have a stimulatory effect within the domestic economy.

These are just some of the facts that the Unite $15 per hour campaign at www.unite.org.nz have been marshalling in support of their cause. Indeed, they are all reasonable and plausible. I urge people to go to their website and download the petition and then get your friends, neighbours and work colleagues to sign it! If the target of 350,000 signatures (approximately) can be reached by May next year, then the Government will have no choice but to hold a citizens initiated poll within 12 months (which means that it could be held in conjunction with the 2011 election to save costs).

While I am no declared fan of citizens referenda given their past utlisation by right wing organisations, I am in favour at least of this one taking place. But the Government still has the possibility to forestall one if it decides to go ahead and raise the minimum wage to $15 per hour at the next review due before Christmas!

As I doubt that this will happen, the need to keep the pressure on through the referendum petition campaign is the best we can do!

NB: Chris Ford is a member of the Unite union.

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