NZ Labour now furthest left in OECD
"Cunliffe should focus more on increasing the median wage rather than the minimum wage"Featured comment
The country’s union bosses have well and truly got their money back from their investment in David Cunliffe.
In his campaign for the party leadership, Mr Cunliffe promised to put an end to the “neo-liberal” policies practised since 1984 under David Lange, Jim Bolger, Helen Clark and John Key.
At last week’s Council of Trade Unions’ conference, he implicitly criticised even Ms Clark’s record, thundering that a government he leads will be “true red” not “pale blue”.
This being Mr Cunliffe, his rhetorical flourishes can be safely ignored but the union barons will hold him to his specific policy pledges.
First and foremost was an unequivocal commitment to “immediately raise the minimum wage to $15 an hour.
“It is not acceptable,” he pronounced, “to have a minimum wage set as low as $13.75.”
After his government’s immediate increase to $15, there will be “further increases to the minimum wage on an annual basis as the country can afford.”
Government workers would benefit first, he announced. In Green/Labour’s first budget, a minimum wage of $18.40 an hour – or $38,000 a year – would be legislated for across the public service, currently around 30% of the economy but certain to rise under Mr Cunliffe
The $18.40 rate is the amount that an Anglican cleric, the Rev Charles Waldegrave, has calculated is the minimum “living wage.”
It would become illegal for a Work & Income office in Kaitaia, Invercargill or anywhere in between to hire a new receptionist or filing clerk on less than $38,000 a year.
The current 90-day probation period would also be abolished, Mr Cunliffe assured the unions.
It would become illegal for the $38,000-a-year WINZ filing clerk, hired straight out of school, to be given a three-month trial.
Mr Cunliffe’s speech received modest coverage in the daily media. The earnest leftists who control most newsrooms saw it as encouraging in its rhetoric but unremarkable in its content. In fact, Mr Cunliffe outlined the most radically left industrial relations policy in the developed world.
The truth is that New Zealand already has, by some measures, the highest minimum wage in the world (see tables).
The most recent OECD comparative data ranked our minimum wage – then $US11.18 – as the fifth highest in the developed world on an hourly basis, behind Australia, Luxembourg, France and Belgium.
Because New Zealand has not yet moved to a 35-hour working week – give Mr Cunliffe time – our minimum wage was ranked third on an annual basis, behind only Australia and Luxembourg.
As a percentage of the average wage, New Zealand had the world’s highest minimum wage.
Note, of course, that these figures are from 2011. Since then, those dangerous communists Kate Wilkinson and Simon Bridges have increased the minimum wage by a further 5.8%, from $13.00 to $13.75.
Mr Cunliffe is an intelligent person who has studied all the OECD data on the minimum wage and understands that probation periods are entirely mainstream internationally. His declaration that it is “not acceptable” to have a minimum wage “as low” as $13.75 is just another example of him at his disingenuous best.
Make no mistake: Mr Cunliffe knows all too well that his promise of an immediate move to $15 an hour and the abolition all probation provisions is extraordinarily radical, which is why he knew it would be popular with the union top brass.
Those promoting these extremist “living wage” policies cite The Warehouse as their model. That company, of course, has not actually implemented an $18.40 minimum wage for its workers. It merely promises to move toward it for some of them. Set aside that its business model is all about importing cheap junk from countries that have no real minimum wages or labour and environmental standards. We are nevertheless meant to shop there because some of its low-paid staff will one day earn $38,000 a year.
It is almost a parable of Mr Cunliffe’s approach to politics.