KEY POINTS:
Listening to Business New Zealand chief executive, Phil O'Reilly, warning Prime Minister John Key that in these troubled times, the last thing the Government should do is raise the minimum wage, reminded me of that old working class ditty about it being the same the whole world over.
"It's the poor what gets the blame, It's the rich what gets the gravy,
Ain't it a bloody shame."
Mr O'Reilly said on Monday that "right now, of all times, you don't want to make those on the margins of the workforce more difficult to hire".
Perhaps if he'd added that right now is no time to give the chief executive of Telecom a $500-plus tax reduction (due on April 1) either, I might have been able to take Mr O'Reilly's concern for the greater good of the economy more seriously. Of course Mr O'Reilly has been chanting the same mantra every 12 months around this time, back to the year dot - well back to 2002 anyway when I finally gave up looking.
Each year from 2002 on, the Ministry of Labour's report to Cabinet on the minimum wage has included in its summary of consultation, the passage, "employers groups supported leaving minimum wage rate unchanged" or words to that effect. Among the groups listed were Business New Zealand, Federated Farmers and the Hospitality Association.
The reality is, even when New Zealand had the lowest unemployment rates in the history of mankind, Mr O'Reilly was trotting out the same old chorus. To him, there will never be a right time to pay those on what he calls "the margins" a living wage.
On Monday there was doom and despondency amongst worker advocates at the announcement that Cabinet had delayed a decision on increasing the minium wage. From a more positive standpoint, the good news is that they didn't reject an increase out of hand, which was how Mr O'Reilly quoted expectations earlier in the month.
It seems the pragmatics in the Key Government appreciate how unfair - or at least how bad it would look - handing out triple-figure tax breaks to themselves and Mr O'Reilly in April, while at the same time, telling those at the bottom of the heap to tighten their belt for the greater good of the economy.
The Ministry of Labour is refusing to release its 2008 recommendations until Cabinet has made its decision but the indication is, the ministry backs a rate of $12.50 an hour - an increase of 50 cents to cover loss of purchasing power due to inflation over the past year. Since 2000, the minimum wage has risen each year from $7.55 to its current rate of $12. Between 2000 and 2001 it went up a modest 15 cents, the next year 30 cents then in 50 cent rises until March 2006 when it went up 75 cents. The next year it went up $1, then back in April 2008 to a 75 cent increase.
The 2007 Department of Labour report told ministers the minimum wage "is part of the Government's general responsibility to ensure socially acceptable employment standards". It pointed to international commitments establishing "an explicit obligation on the Government to ensure an adequate minimum wage" including International Labour Organisation Convention 26 which recommends minimum wages be set according to the "general level of wages prevailing in the country".
It pointed to government-agreed objectives for the minimum wage based on "fairness - to ensure that wages paid are no lower than a socially acceptable minimum; protection - to offer wage protection to vulnerable workers so that workers are paid wages that reflect their worth or productivity; income distribution - to ensure that earnings of people on low income do not deteriorate relative to other workers; work incentives - to increase the incentives to work, for people considering work."
In last year's report Labour Department officials said that freezing the rate at its existing level "could erode the real value" and may "also negatively impact on incentives to work through a reduction in the gap between the minimum wage and benefit levels ..."
The report noted that the hospitality and retail sectors would most benefit, with 24.3 per cent of hospitality workers and 17.4 per cent of retail workers on the minimum. It noted that young people, women and Maori and Pacific people "are the most likely to benefit ..."
The Ministry of Pacific Island Affairs backed the rise to $12 and went further, supporting a rise to $13.50 "as this improves the levels of fairness and protection for Pacific wage earners who are over-represented amongst these lower wage brackets, particularly Pacific women who earn significantly less than other women".
These are the people on Mr O'Reilly's margins. The ones he opposes giving a wage rise too - yet again - while happily supporting large tax cuts for himself and his employer mates.
Ain't it a bloody shame.
