Raising the minimum wage

Labour and the Greens have both committed to raising the minimum wage in government.

During the last leaders’ debate I got a few tweets from people insisting that raising the minimum wage would obviously kill all small business in New Zealand.

The thing is, like a lot of rightwing excuses for not helping the workers of New Zealand to get a fair deal, it’s rubbish.

There just is no evidence that raising the minimum wage means people lose jobs.

This 2013 report found that “the minimum wage has little or no discernible effect on the employment prospects of low-wage workers” – because the “cost shock” of raising it is small relative to the overall costs of running a business; because employers can adjust other costs to balance it out; and because people work harder and turnover drops when they’re paid a decent wage.

And while I couldn’t find any data for NZ, in the United States 66% of workers on minimum wage aren’t employed by struggling mom-and-pop businesses – they’re employed by companies like Wal-Mart and McDonald’s.

John Key was very particular about his concern for the poor hairdressers of Foxton who would be rendered destitute by paying their workers a few dollars more an hour. Hairdressers are clearly on the minds of the right – here’s DPF trying to argue that we shouldn’t have fair employment law because the hardworking hairdressers of Christchurch will suffer – so maybe they’d be interested in the views of a salon owner from Levin, who talked to Labour’s candidate for Ōtaki:

Raising the minimum wage is quite simply a good and necessary idea. It helps families, it helps businesses, it helps communities, and the reason it’s a leftwing thing to do is because we care about people not money.

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