A terrible time to hike the minimum wage
The Herald reports:
National has joined the increasing chorus of voices urging the Government to defer the planned minimum wage increase in light of the economic uncertainty created by coronavirus.
He has called the current situation an “economic crisis” and even said that New Zealand was on the doorstep of a recession.
“Businesses are facing substantial cost increases when the minimum wage goes up on April 1,” party leader Simon Bridges said this morning.
He wants the Government to defer the increase by at least six months.
Deferring the increase should be a no brainer. Many businesses are having their income plummet. They are running out of money and they are having to decide how many staff to let go.
So it’s a terrible time to have the Government increase the cost of staffing.
Also the minimum wage is already basically the highest in the developed world relative to the average wage. In 2018 the ratio of minimum to mean wages was:
- NZ 52%
- France 50%
- Slovenia 48%
- Australia 47%
- Canada 45%
- Israel 45%
- UK 45%
- Luxembourg 44%
- Poland 32%
- Romania 43%
So we already have the most generous (and expensive) minimum wage in the developed world and the Government is going to increase it even more just as businesses are planning to start laying staff off.
Madness.