Employment compensation

Bob Jones on the living wage

Yesterday Bob Jones gave his considered opinion on the living wage.

He has spent some considerable time talking to retailers about costs in their businesses, which led him to a discussion on wages and staffing:

My inquiry as to the best employees brought an unsurprising answer – new immigrants by a country mile. What particularly interested me was the salaries for what’s essentially menial work. In most cases they’re on the minimum wage. Any more and they’re out of business, he said, and I believe him.

I mention all of this in the context of the absurdly titled living wage clamour, the noise invariably coming from leftish critics not employing anyone, nor ever likely to. There are exceptions. Two leftie Wellington city councillors, respective owners of small city retail food businesses, led the charge recently for menial task council employees to be paid the so-called living wage. Inquiry however, revealed their own employees were on the minimum wage.

“We’d go broke,” they wailed when their hypocrisy was exposed. It was classic left do as I say, not as I do, double standards. Everyone benefits from a high wage economy as it increases spending power and thus the economy. But it also necessarily increases prices which no one wants to meet, thus shop assistants are the lowest paid sector in the work force, despite being one of the largest. ? Read more »

Want robots at McDonald’s? Hike the minimum wage

A reader in the US?writes:

It’s been an interesting debate here with the usual rough and tumble of different layers of government, it’s a struggle to get the minimum wage to $10.25 an hour which is outraging groups on both sides.

Unlike back home the media provide both sides and then leave it to the viewer to decide. They will have the hard working fast food worker putting across their reasoned position then the small business owner who will have to let a staff member go if the wages are hiked. There is no screaming from a Helen Kelly and neither would the business community have someone as hopeless as the guy from BuisinessNZ either backing their argument.

It’s a compelling argument that if the minimum wage is too high someone won’t get the opportunity of that entry level job which allows them to gain skills and experience that allows them to move ahead. You get a real life view of what would happen if you pass that tipping point of pricing young people out of the labour market and it’s called 50% unemployment and a lost generation in Europe, compare that to the USA where young people in service industry jobs are generally happy to help and happy in life.

If you find yourself at 40 still on the same wage as your 25 year old boss it shouldn’t be up to the government to give you that pay rise…in fact that very same caring leftie government is a threat to you as they will price you out of a job which could end up being a terminal situation.

Read more »

Labour relaunches their Hobbit Hater policy

Labour has re-launched their Hobbit Hater policy at the behest of the unions, proving that their investment in purchasing David Cunliffe and the 20% vote for the leadership has provided a cash for policy arrangement that is giving their leaders sticky knickers.

The Labour Party wants to repeal the law changes that were ceded to Warner Bros over The Hobbit films, a move which the Government says would cripple the $3 billion screen industry.

Labour leader David Cunliffe and MP Andrew Little launched the party’s work and wages policy yesterday, which included a boost to the minimum wage, and a commission of inquiry into workplace conditions.

Here’s an idea…why don;t they just declare a wages crisis, and in short order National will fix the problem. Seems to have worked for manufacturing and housing…it’s worth a crack.

So Labour wants to kill off the film industry in NZ, Dotcom’s party just wants to steal it, and the Greens want to destroy the oil?and gas industry.

They really are the wrecking ball of the NZ economy.

But wait it gets worse…Labour also wants to kill jobs.? Read more »

Greens propose locking in never ending pay rises for MPs

The Green party think they are onto a winner…locking in never ending pay rises for MPs…except they think that sometimes pay will go down.

The Green Party is urging for a change to how MPs’ salaries are set, in a bid to curb their annual pay rises.

That would make a difference of thousands of dollars in the amount MPs received extra each year.

In a policy announced today, Green Party co-leader Russel Norman said MPs’ salaries should only rise to match the rise in median incomes in dollar terms.

MPs usually receive an annual increase that largely rises in line with pay rises in the general population – though because it is in percentage terms, not dollar terms, it can be worth significantly more.

During the global financial crisis MPs asked for a zero pay increase.

Norman said under the Green Party’s policy MPs’ salaries would rise or fall by the same dollar amount that median incomes increased or fell.

“Rather than the current annual review carried out by the Remuneration Authority that sets MPs’ salaries, the Remuneration Authority would be required to apply the annual change in median individual income supplied by Statistics New Zealand.

And here is what that Statistics New Zealand media weekly income data shows:

Source data from Statistics NZ http://nzdotstat.stats.govt.nz/wbos/Index.aspx

Source data from Statistics NZ http://nzdotstat.stats.govt.nz/wbos/Index.aspx

 

Read more »

Wellington Council faces living wage blowout

The stupid politicians in Wellington who handed over their wage negotiations to Rev Charles Waldegrave are now facing the prospect of a massive blowout in the wages bill after the Rev. Charles Waldegrave decided to unilaterally increase his Living Wage assessment.

Wellington City Council is facing a budget blowout on its living wage policy, just two months after becoming the first council to adopt it.

Councillors voted 9-5 in December to adopt the living wage for its staff at a rate of $18.40 an hour. But Living Wage Aotearoa, the group that sets the rate, has now raised it to $18.80.

Andy Foster, who voted against the living wage in December, said the increase would lift the wage bill for the 400 staff directly employed by the council by $332,000 a year.

But he warned that figure could blow out to as much as $5 million if it was extended to people working for council-controlled organisations and on council contracts, and if relativity adjustments were made for other staff.

“These are big numbers,” he said.

The latest rise highlighted his philosophical concern that the council had effectively handed control of staff pay-setting to an outside organisation.? Read more »

The Living Wage kills jobs

The left wing are pushing hard for what they call the Living Wage, which is really just a number decided arbitrarily by the Rev. Charles Waldegrave.

There is no evidence generally to support the contention that it works or even helps. But evidence is starting to mount that the so-called Living Wage is death to jobs?and ineffective in alleviating poverty, which is the main driver behind it.

A new report from the Fraser Institute argues that municipal laws intended to boost the wages of poorer workers threaten job prospects for the very people most likely to face poverty.

In its survey of scholarly studies, released Tuesday, the market-oriented think-tank concludes laws mandating what are called ?living wages? ? generally defined as the minimum earnings that allow full-time workers to meet the basic needs of their families and reach past low-income-tax thresholds ? do little to help the most vulnerable workers.

?Both economic theory and the evidence suggest that living wages, like minimum wages, create distortions in the labour market that have a negative impact on employment,? wrote author Charles Lammam.

Faced with having to pay higher wages, employers push back by reducing overall employment, favouring more highly skilled workers and cutting back on hours and training, the report found. It cited U.S. research that showed a 100% increase in living wages, to $20 an hour from $10 an hour, reduced employment among low-skilled workers by between 12 and 17%.

?Indeed, there is a trade-off between the workers who benefit from a higher wage and those who endure the costs due to fewer employment opportunities,? Mr. Lammam wrote.? Read more »

Living Wage myths busted in new report

A number of people have blogged the details of Brian Scott’s report into the stupidity and flawed logic behind the living wage calculations and campaign. I have blogged previously about the inconsistencies between the living wage proposals in NZ and the UK.

David Farrar summarised it as follows:

Brian Scott has published a critique of the so called Living Wage, and it should be compulsory reading for any politician that has treated the calculations done by Rev Waldegrave as a fit basis for public policy decisions. It is quite legitimate to have a view that wages should be higher, but to insist that the correct level is that calculated by Rev Waldegrave is a surrender to symbolism over substance.

The key findings by Scott are:

  1. Only 12% of low income households are two adults and two dependents, which the Waldegrave calculation is based on
  2. They assume you need 10 hours of childcare a week, even if the children are aged over 14
  3. They calculation of level of ?basic necessities? is not based on any empirical measurement of the lowest cost of necessities, but merely a proportion of the average expenditure in deciles 1 to 5 (this one is key ? it is a calculation based on the Browns should be spending as much as the Jones, and is not a caculation on how much income the Browns need)
  4. The calculation doesn?t account for some sources of household income such as trade-ins, sales, teenagers income (yet does include their costs) and school donation tax refunds
  5. The calculation double counts some expenditure such as childcare costs
  6. The calculation includes as a basic necessity costs such as Sky TV, pets, international travel and video games
  7. The calculation includes insurance for dwellings and mortgages, despite assuming they are renting ? Read more »

Lenny the Louche is going force the Living Wage on us

As predicted months ago on this blog in a series of posts Len Brown is now having to pay back the left-wing for their support and assistance by imposing the “living wage” on Auckland ratepayers. He is treating Auckland ratepayers like his women, forcing himself through weasel words, sweet nothings and promises of a better future…that never arrives or pulls out at the last-minute.

Ben Irwin reports at The NZ Herald:

Auckland Mayor Len Brown will propose a “living wage” of $18.40 for all Auckland Council staff at a council meeting today.

The policy, which will cost $3.75 million a year, will be paid for through savings in other parts of the council and phased in over three years, starting in 2014.

The mayor also wants the council to look at a living wage for staff of contracted organisations.

The new pay-rate would apply to both council and council-controlled organisation staff, and was based on data by the Family Centre Social Policy Research Unit.

Mr Brown said Auckland relied on low-paid workers, many of whom found it difficult to survive on the minimum wage in the city.

“It’s only fair that these people are able to enjoy a decent standard of living,” he said. “While I would prefer this was an issue addressed by central Government through adjustments to the minimum wage, I am supportive of moves to pay our frontline staff a reasonable wage, provided it doesn’t impact on ratepayers.” ? Read more »

It appears to be more expensive to live here than in the UK

The left-wing are all enthralled to promote the so-called “living wage”. A magical number pulled from an Anglican minister’s arse that is supposedly the required amount needed for a worker with a family of two kids to “survive”.

In New Zealand it has been set at $18.40.

Now compare that with the UK. The Guardian reports:

More than 30,000 low-paid workers are set for a?pay?rise of up to ?400 a year after an increase in the?living wage.

The voluntary rate will increase by 20p an hour to ?7.65 outside?London. It is higher than the legal minimum wage, which stands at ?6.31 an hour for over-21s. The London living wage rate is increasing from ?8.55 an hour to ?8.80. ? ? Read more »

An open letter to David Cunliffe

Mike Clement has written an open letter to David Cunliffe on his Facebook page…I’m not expecting any sort of answer from Cunliffe, other than weasel words and platitudes. More likely is the letter will be quietly deleted and ignored along with the comments it is attracting.

It will be interesting to see if he can speak to people other than union flunkies.

Mr Cunliffe,

I listen with great skepticism when I hear yourself or any of your fellow MP’s talk about a living wage, and how you care a great deal about those workers earning minimum wage or very near it. All this while you earn in excess of $100,000 a year.

If you really do care and believe in this living wage and the workers in Parliament who clean your toilets here is an idea:? Read more »

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