The New ACT Party, in the form of Jamie Whyte, says in announcing yet another rise to the minimum wage the Nats have bowed to the old minimum wage myth that “minimum wages protect the poor.”
But that’s not quite true, is it, not when you read Key’s announcement yesterday, where he said that “advice considered by Cabinet when it made its decision … was that the increase would result in a ‘relatively negligible’ loss of jobs.”
That advice said a rise to $14.50 an hour would result in the loss of about 2,300 jobs.
So what Key hasn’t done is bow to the minimum wage myths at all. He understands perfectly well that raising the minimum wages costs jobs. He understands, as even the US Congressional Budget Office does, that raising the legal minimum wage
raises the incomes of low-wage workers who remain employed while lowering the incomes of low-wage workers who lose their jobs.
So he’s not truly as dumb as Jamie Whyte makes out. He’s simply happy to sacrifice 2000 or so young and marginal for political expediency.
That’s just the kind of political leader he is.
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Except that it was the proposed minimum wage increase to $14.25 that was neglible in its effect and an increase to $14.50 (which it NOT happening) that would cost the loss of 2300 jobs. I.e. Key was explaining why the increase in minimum wage was still conservative. And also demonstrating economic literacy as well as political acumen.
Not so: "Labour Minister Simon Bridges said the 50 cent rise balanced the needs of businesses and workers... Advice to cabinet was that a 50 cent rise could cause the loss of around 2300 jobs."
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