Tuesday, March 08, 2011

"Closing the gap" - but not for the poor

And to combine today's OIA with yesterday's: Wilkinson's minimum wage review [PDF] includes international comparisons. It notes that

A comparison with Australia is most useful due to its close economic connections with New Zealand and the relatively free movement of labour between the two countries. The Australian federal minimum wage increased by 4.8% from AU$14.31 to AU$15.00 following their 2010 review. The current Australian minimum wage rate equates to NZ$19.31 on 1 November 2010.
So, Wilkinson chose an increase less than that in Australia, one which will result in a relative decline in living standards for those on the bottom. And this is deliberate. A later document notes that
New Zealand's minimum wage is 49.5% of average weekly wages, higher than Australia's by 4.3 percentage points.
Wilkinson has highlighted this in the margin. The obvious conclusion: she sees this as the gap which needs closing. And the way to close it is by eroding the living standards of ordinary New Zealanders.