minimum wage

More good news: lower income people had highest pay rises

This news will rip the y-fronts of Labour, since they always bang in about those at the bottom not enjoying bigger payrises.

Turns out they do and have.

If you were asked to imagine the type of household that has experienced the biggest pay boost this year, you might not pick minimum wage workers.

But new data shows that it is the lowest-earning people in New Zealand who saw the biggest boost to their pay packets over the past 12 months.

Recent data from Statistics NZ showed that, nationwide, earnings across self-employed, employed and those on government benefits increased 5 per cent year-on-year in the June quarter.

The median weekly earnings from paid employment rose $44 to reach $924 a week between June 2015 and June 2016. That is the largest percentage increase since 2007.

But looking further into the data, of those on wages and salaries, those earning less than $500 a week had the biggest year-on-year percentage pay rise, up 4.8 per cent between June 2015 and 2016.

The median income for that bracket increased from $271 a week to $284.

That was followed by a 2.6 per cent increase for those earning between $500 and $770. The median income in that bracket is now $670, compared to $653 a year ago.

Everyone earning more than $770 as week is now earning marginally less than they were the same time last year.

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Does it do good or does it feel good?


In a continuation of the article about the differences between the left and the right’s worldview, let’s analyse a 2007 political policy decision by asking these questions:

Does it do good?

Does it feel good?

In 2007 the Labour government changed the law so that the intellectually disabled would be paid the minimum wage. This was a feel good policy and they ignored the many families (including my own) that begged them to reconsider. We told them it would hurt intellectually disabled men and women who needed a lot of supervision and staff support in order to be able to work. If they forced sheltered workshops to the pay minimum wage then they would have to close. Businesses who previously were happy to take on a disabled person would shut their doors because an intellectually disabled person needs support to do their job, unlike an able-bodied person.

The Labour government, under Helen Clark, ignored the pleas of families all over New Zealand because, to them, this was a policy that looked great on paper and made people ignorant of the truth feel good.

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Labour should read this since they are talking about the Future of Work

Want to know why automation is replacing menial jobs?

Labour want to know…as they have their Ten Big bumper sticker slogans and attempt to find out why it is that automation is going to replace every job.

They should read the Wall Street Journal article about restaurant automation and wonder no more about why it is people are being replaced.

Consumer preferences, reduced technology costs and government policies that increase labor costs are driving a trend toward automation in the restaurant business. If you make something more convenient and less expensive, it tends to catch on.

As recently as the 1960s, gas-station employees would rush to fill your car’s tank, wash the windows, check the oil and put air in the tires. Telephone operators made your long-distance calls and bank tellers cashed your checks. Those jobs now are either gone or greatly diminished.

Today, we reduce jobs whenever we shop on Amazon instead of our local retail outlet, use an Uber app rather than calling a cab dispatcher, order a pizza online, use an airport kiosk to print boarding passes, or scan groceries. Each of these changes in behavior has increased convenience and reduced labor costs—and competitive businesses pass the savings to their customers.

In the restaurant business, the increasing impact of technology doesn’t mean that a robot will soon roll up to your table and say, “Hi, I’m Trudi4783. I’ll be your automated server today.” But technology can replace certain functions. Touch screens are already transforming the way food is ordered in many restaurants.

In late 2013, Chili’s and Applebee’s announced that they were installing more than 100,000 tableside tablets at their restaurants across the country, allowing customers to order and pay their bill without ever talking to a waiter. The companies were soon followed by Buffalo Wild Wings, Panera Bread, Olive Garden and dozens of others. This means fewer servers covering more tables. Quick-service restaurant chains are also testing touch-screen ordering.

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Perhaps if we set the minimum wage at $50/hr, all our problems will be solved

The other day Martyn Bradbury declared :

The living wage is $19.80 – let’s push for $20. The arguments for increasing it outweigh the negative. People spend that money directly into their neighbourhoods, small business will benefit from more local spending – large corporations will get grumpy. But screw them.

This demonstrates the retarded spasticity of the left wing when it comes to simple economics.

But it isn’t just this fool. It seems there are plenty of others pushing for the minimum wage to become the highest in the OECD.

Earlier this week, the government raised the minimum wage by 50 cents, and the country’s living wage movement announced a new rate of $19.80.

In a debate on RNZ’s Sunday Morning programme, Eric Crampton, who is an economist and the director of the New Zealand Initiative, said among developed countries New Zealand already had the highest minimum wage in relation to the average wage.

Mr Crampton said it was unreasonable to set the minimum wage high enough for people to live off it without any subsidy.   Read more »


Face of the day

Alison Mau Photo-Stuff

Alison Mau

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Wellington Chamber of Commerce to seek judicial review of Council decision over living wage

Very pleased to see that the Wellington Chamber of Commerce is seeking a judicial review of the council’s dopey living wage rules.

It’s about time that dud councillors were held personally responsible for their dopey decisions.

Wellington City Council’s decision to pay its security contractors a living wage is headed to the High Court, and ratepayers could end up paying some of the legal bills.

The Wellington Chamber of Commerce announced on Friday that it would seek a judicial review of the council’s living wage policy.

The council, which has been paying its own staff a living wage since 2013, voted 9-6 in October to require its security services contractors do the same.

The living wage is the hourly rate a worker needs to participate as an active citizen in the community. That amount is currently $19.25 per hour but the council’s interpretation is $18.55.

Bumping up the wages of all security guards, noise control officers and cash collection staff was estimated to cost the council an extra $1.7 million on top of the price of the seven-year contract.    Read more »

We are in the top ten for minimum wages in the world


CNN reports:

Low wage workers in Australia have it better than most.

The country has the most generous national minimum wage in the developed world, according to a report from the Organisation for Economic Co-operation and Development.

The report ranked 27 countries that have laws setting a nationwide minimum rate of pay.

Australia’s minimum wage workers — aged 21 and over — make 15.96 Australian dollars per hour. After tax and other deductions, that’s equivalent to $9.54, once the difference in the cost of living is taken into account.

“They have a high minimum wage. And interestingly they have a low tax burden,” said Herwig Immervoll, the author of the OECD report. “[Australians] recognize that supporting low wage earners through the tax system is important.”

Other countries have set higher hourly rates but they also tax minimum wage workers more, leaving them with less in their pockets.   Read more »


This is what happens when you artificially increase labour costs

Minimum wages are designed to protect low paid workers, and governments periodically recalibrate the minimum wage.

Even then there are advocates for the so-called “living wage” which is even higher than the legal minimum wage.

All of these efforts though are distorting the market price for labour. And if the minimum wage rises past point at which the job is no longer viable then it ceases to exist, especially as technology allows for a cheaper alternative.

Hamburgers are a multi-billion dollar business, and while fast food chains have got the process down to an efficient production line process, making them is still labor intensive with armies of burger flippers and sandwich assemblers. In a move that could put millions of teenagers around the world out of their first job, Momentum Machines is creating a hamburger-making machine that churns out made-to-order burgers at industrial speeds and aims to use it in its own chain of restaurants.

According to Momentum Machines, making burgers costs US$9 billion a year in wages in the United States alone. The company points out that a machine that could make burgers with minimum human intervention would not only provide huge savings in labor costs, but would also reduce preparation space with a burger kitchen replaced by a much smaller and cheaper stainless-steel box.

This self-contained, automatic device sees raw ingredients go in one end and the completed custom-made burgers come out the other at the rate of up to 400 per hour. The machine stamps out the patties, uses what the company says are “gourmet cooking techniques never before used in a fast food restaurant,” applies the toppings (which are cut only after ordering to ensure freshness), and even bags the burgers.

The company plans to open its first restaurant in the near future and to market the machines to third parties, arguing that one can pay for itself inside of a year. The company is targeting restaurants, convenience stores, food trucks and vending machine applications.

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The unintended consequences that do-gooders never think of

A living wage? Increase the minimum wage?

Good ideas right?

Perhaps not…on the surface it’s all motherhood and apple pie until the rubber hits the road.

In Seattle the minimum wage has been jacked up to $15 by the local authorities. It is the highest minimum wage in the United States.

And it has had an effect…just not a positive one.

In a few weeks, Seattle’s new, highest in the country, $15 per hour minimum wage will go into effect. Like many liberal policies, it was passed by City Hall with the best of intentions. The only problem is, in the end, it may do more harm than good for many.

Private businesses, unlike government entities (which, in theory, can always raise taxes or borrow), must make more than they spend in order to pay the rent, make payroll, keep the lights on, pay their business taxes, and, heaven forbid, have some left over for the owners and investors who are taking the risk and putting in the long hours.

Earlier this month, Seattle Magazine asked, Why Are So Many Seattle Restaurants Closing Lately?:

Last month—and particularly last week— Seattle foodies were downcast as the blows kept coming: Queen Anne’s Grub closed February 15. Pioneer Square’s Little Uncle shut down February 25. Shanik’s Meeru Dhalwala announced that it will close March 21. Renée Erickson’s Boat Street Café will shutter May 30 after 17 years with her at the helm…What the #*%&$* is going on? A variety of things, probably—and a good chance there is more change to come.

The magazine went on to report that one “major factor affecting restaurant futures in our city is the impending minimum wage hike.” Anthony Anton, president and CEO of Washington Restaurant Association, told the magazine, “It’s not a political problem; it’s a math problem.” He estimates that restaurants usually have a budget breakdown of about 36 percent for labor, 30 percent for food costs, and 30 percent to cover other operational costs. That leaves 4 percent for a profit margin. When labor costs shoot up to say 42 percent, something has to give.

Restaurants can take actions to adjust, such as raise their prices, acquire cheaper ingredients, and cut their operating hours and labor force. However, all those actions generate reactions from the public which can still lead to lower revenues for the restaurant and, for some, the decision to close their doors.

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I hate scumbag employers that let the side down

Andrew Little and his union mates use cases like this to justify rules, actions and new laws against 99.9% of the business world because of scumbags like this.

A Christchurch construction company breached labour laws by failing to pay the minimum wage and keep employment records for workers, the Employment Relations Authority found.

The Ministry of Business, Innovation and Employment’s Labour Inspectorate investigated Verney Construction Limited last year after receiving a complaint from two employees involved in the Christchurch rebuild.

The investigation found that the workers had been treated as contractors, when in fact they were employees.

They had not received the minimum wage or their final holiday pay and were not provided with employment agreements. Read more »