6,400 Jobs Lost To Minimum Wage

act-new-zealand

Fri Feb 11 2022 13:00:00 GMT+1300 (New Zealand Daylight Time)

6,400 Jobs Lost To Minimum Wage

Friday, 11 February 2022, 10:27 am
Press Release: ACT New Zealand

“MBIE advised the Government to go slower in raising the minimum wage and estimates thousands fewer jobs will be created as a result of its hike”, says ACT Leader David Seymour.

“MBIE estimated that raising the minimum wage to $21.25 an hour, 5 cents more than Labour chose, would restrain employment growth by 6,400 jobs.

“This move will mean businesses raise their prices or close, and more people are out of work and on welfare for longer. We just can’t afford that.

“Michael Wood argues the minimum wage increase will have a ‘stimulatory’ effect on the economy. Both MBIE and Treasury have repeatedly told the Government this is unlikely to happen:

‘There is also an argument that lifting the minimum wage can result in increased overall consumer demand caused by minimum wage earners spending the additional money as they normally spend a high proportion, if not all, of their earnings. For this to happen, the increase in overall spending would need to be significant. As only a small number of people earn at or near the minimum wage (estimated to be 175.500 people or 9.2 per cent of all wage earners in the 2020 Minimum Wage Report), this effect is unlikely to occur in New Zealand.’

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“Here’s the reality: Labour is raising the minimum wage by 6 per cent because inflation is running at 6 per cent.

“The Reserve Bank has printed – and Labour has borrowed and spent – tens of billions of dollars in the past two years. That money is moving around the economy and pushing up the price of everything.

“Border restrictions and Red traffic light restrictions mean less is being produced and business costs are higher. New rules and new taxes push up prices as well.

“Prices have gone up 5.9 per cent. Wages have gone up just 2.6 per cent. Kiwis can buy less with their money – they’re getting poorer.

“Inflation is at a 31-year high and Kiwis are being squeezed from every direction – at the checkout, at the petrol pump, and when they pay the rent.

“The only adequate response is a return to rational economics.”

ACT would:

Get borrowing and wasteful spending under control
Change the Reserve Bank legislation back to focusing on inflation only
Provide tax relief, cutting the 30 per cent tax rate to 17.5 per cent, giving the average worker an extra $2,000
Stop hitting businesses and productive people with new rules and taxes
Immediately allow all vaccinated, negative tested travellers into the country – New Zealanders, workers, students and tourists.

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