Minimum Wage increases

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Ultimate Geek
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#2148859 21-Dec-2018 14:26

MikeB4: @6FIEND I misinterpreted your post and I most certainly apologize.

No problem. It would seem that my post was highly ambiguous :-)

Eitsop

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#2148864 21-Dec-2018 14:32

networkn:That's a pretty simplistic view. Households require many more things that than. Clothing, vehicle running costs, etc etc

Don't think its simplistic.. clothing mostly comes from overseas, vehicles come from overseas, petrol comes from overseas

Which part of economy will be hit by price increases from your perspective?

I can only think off Baristas/Mcdonalds/grocery stores even then wages are only a small component

6FIEND

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Ultimate Geek
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#2148873 21-Dec-2018 14:37

tdgeek:

As I said, there will be issues with those on low wages but above minimum wage, maintaining that.

^^^

This really goes to the heart of the point I was trying to make.

The challenge that we face in NZ is that "those on low wages but above minimum wage" account for a very large percentage of our workforce.

If we consider minimum vs. median wage, the April 1 changes will see minimum wage rise to 70% of what the "middle" person in NZ earns. (And planned to rise to 80% of the 2018 median in the next 24 months)

That's a very tight grouping of the bottom half of all kiwi wage earners. (much, much higher than the rest of the OECD)

GV27

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#2148874 21-Dec-2018 14:41

attewell:
GV27:

attewell: All boats will rise with the tide incl clerks teachers and nurses

It’s about making a correction for years of land and house inflation. To bring us back to a basic living standard

Again, New Zealand productivity gains have not made it back to workers as costs of living have risen. The boats do not rise with the tide in New Zealand or else you wouldn't need to keep lifting the minimum wage.

The tide is the minimum wage. If we lift this. Other wages will increase

Thanks, I know how metaphors work. The problem is there is no evidence that this is the case and an old-timey saying doesn't = proof.

tdgeek

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#2148876 21-Dec-2018 14:46

6FIEND:

tdgeek:

As I said, there will be issues with those on low wages but above minimum wage, maintaining that.

^^^

This really goes to the heart of the point I was trying to make.

The challenge that we face in NZ is that "those on low wages but above minimum wage" account for a very large percentage of our workforce.

If we consider minimum vs. median wage, the April 1 changes will see minimum wage rise to 70% of what the "middle" person in NZ earns. (And planned to rise to 80% of the 2018 median in the next 24 months)

That's a very tight grouping of the bottom half of all kiwi wage earners. (much, much higher than the rest of the OECD)

Ok lets crunch some numbers. Minimum wage is now 34. Median is 49. 70%. Does the 80% allow for the median wage to increase? I agree its a tight grouping but its already tight.

6FIEND

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Ultimate Geek
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#2148886 21-Dec-2018 15:11

@tdgeek yes - 80% should allow for the median wage to increase.

According to:

https://www.stats.govt.nz/information-releases/labour-market-statistics-income-june-2018-quarter

...the median weekly earnings has gone from $730 to $997 pw. over the past 10yrs. This is an average of 3.7% increase year on year.

So, going back to the current values. 2019 minimum wage ($17.70/hr) is 70% of the current median wage ($24.93/hr).

Planned 2021 minimum wage ($20.00/hr) would be measured against forecast median wage ($26.80/hr)

That would be about 75%.

This is the highest in the OECD. How does this compare with other countries?

New Zealand
France 62%
Australia 55%
UK 54%
Luxembourg 53%
Germany 48%
Belgium 47%
Ireland, Canada 46%
Estonia 41%
US 34%

Eitsop

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#2148967 21-Dec-2018 16:32

6FIEND: This is the highest in the OECD. How does this compare with other countries?

Not sure this is a great comparison.. they need to have this as net income, as Aussie has different tax rates if I remember correctly.

I think you also need to have other metrics as cost of living vs income

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tdgeek

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#2149174 22-Dec-2018 08:44

6FIEND:

This is the highest in the OECD. How does this compare with other countries?

New Zealand
France 62%
Australia 55%
UK 54%
Luxembourg 53%
Germany 48%
Belgium 47%
Ireland, Canada 46%
Estonia 41%
US 34%

Thanks. There could be two reasons why we are No.1 We could be over generous with the minimum wage, or we have a low wage economy, which means the median is lower, and if our minimum wage was no more than satisfactory, it would be closer to the low wage economy median. We hear often we are a low wage economy, so that's my view. I looked at cost of living, purchasing power (PPP) and we are down the list. Not surprised about that as we are too small and too remote to have economies of scale for manufacturing, so we tend to be a services country, selling low wage agriculture, low wage tourism, and we import most of our manufactured consumed goods. Add retail to that, and we are a low wage economy. If the cost of living is high, PPP is high, you'd expect the minimum wage to be reasonable, but as the median is low, due to our low wage economy, it should be closer to the minimum wage.

But, as you mentioned, the minimum wage issue is not just those on minimum wage, the group that are on low wages, but above minimum wages will be quite high. The minimum wage is now 34k, the median is 49k, so you'd expect those at $34001 to say $40,000 would also want an adjustment.

tdgeek

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#2149175 22-Dec-2018 08:51

attewell:

Min wage should be that 2 adults with 2 kids working 40 hours each should be able to afford rent power food etc no extragagence

You can't do that. While this country supports a social welfare environment, far more than many countries, you can' arbitrarily create a situation where the Govt covers everything. You are moving away to govern the country by another policy, another ****ism. Then those above minimum wage will want tax breaks to cover the deserved extravagances.

Those on lower wages have challenges, so they need to manage those challenges as best they can. The issue is, what is a fair minimum wage that helps them out, but doesn't cause eruptions in the business sector.

Eitsop

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#2149234 22-Dec-2018 11:44

@tdgeek agree about median vs min..

What we need to show as comparisons is histograms showing the spread of wages.. and comparisons to other countries..

GV27

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#2150925 27-Dec-2018 07:52

The signposted $20 an hour will be $41.6K for a 40 hour week. That's not too far off what I started on as a grad in a skilled job about six years ago.

gzt

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#2150949 27-Dec-2018 09:17

GV27: The signposted $20 an hour will be $41.6K for a 40 hour week. That's not too far off what I started on as a grad in a skilled job about six years ago.

Many minimum wage jobs are in fact skilled jobs. The level of experience required for many of them shows you that.

GV27

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#2151048 27-Dec-2018 11:09

gzt:
GV27: The signposted $20 an hour will be $41.6K for a 40 hour week. That's not too far off what I started on as a grad in a skilled job about six years ago.

Many minimum wage jobs are in fact skilled jobs. The level of experience required for many of them shows you that.

I guess if I had claimed that all minimum wage jobs were unskilled that would be relevant.

Aredwood

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#2209171 2-Apr-2019 03:09

The latest Min wage increases came into effect on April 1st. It is now $17.70 per hour.

But due to clawbacks on things like the family's payment, accommodation supplement, income related rents for state house tenants etc. Those who need the money the most, will actually get the lowest increase to their disposable income.

tdgeek

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#2209184 2-Apr-2019 07:18

Aredwood: The latest Min wage increases came into effect on April 1st. It is now $17.70 per hour.

But due to clawbacks on things like the family's payment, accommodation supplement, income related rents for state house tenants etc. Those who need the money the most, will actually get the lowest increase to their disposable income.

Thats true. Its not about disposable income its about the minimum wage. If someone on a higher income that also recieves WFF is exactly the same. They earn an income and they get extra benefits, and these fall off as income rises. If those in minimum wage were treated differently then you would have to ask why the special treatment.

I would ask the question, why have people on the minimum wage last yera and every year before done about these clawbacks?

Minimum wage is one topic, WFF etc is another

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