Thursday, February 01, 2024

Government says "Fuck the poor"

One of the big achievements of the two previous Labour-led governments was regular, large increases to the minimum wage. These lifted incomes and helped drive wage growth for all workers, while incentivising employers to invest in productivity and technology rather than low-skilled production. Well, that's definitely over now, with the government ordering a sub-inflation increase:

Minimum wage workers will get a 2% increase from April 1, when the minimum wage rises from $22.70 to $23.15.

That is despite a warning from the Ministry of Business, Innovation and Employment that an increase below the rate of inflation could make it hard for minimum wage workers to keep up with the cost of living.

Inflation was running at a rate of 4.7% a year in the 12 months to December.

And lest anyone forget, a sub-inflation increase is effectively a cut. So National is deliberately cutting the real wages of the poorest workers.

Reading the Cabinet paper its even worse, because employment minister Brooke van Velden wanted only a 1.3% increase, on the basis that it had increased above inflation since 2018. MBIE recommended 4%, to almost keep pace with the PREFU inflation projection. The overwhelming tone of that paper is of the Minister - a woman who is paid $296,007 a year plus slush - saying "fuck the poor". Which seems like a strong argument for Ministers to be put on the minimum wage, to see how much they like it.