“Jacinda Ardern and Grant Robertson’s ideological objections to delaying an increase to the minimum wage will ultimately hurt workers”, says ACT Leader David Seymour.
“In Parliament today, Ardern and Robertson flatly denied that raising the minimum wage causes firms to employ fewer workers than would otherwise have been the case. That’s contradicted by the evidence and basic economic theory. It’s even more true in bad economic times.
“A growing chorus of economists is now telling the Government to give businesses a break and help them keep workers employed.
“In the last week, ACT and then ANZ’s chief economist called on the Government to delay or scrap the minimum wage hike.
“Today, the National Party and economists Eric Crampton and Shamubeel Eaqub joined in.
“In February, the Ministry of Business, Innovation and Employment predicted 6,500 fewer people in employment as a result of this year’s minimum wage increase.
“That was in much better economic times.
“As ANZ and MBIE have pointed out, in the case of ‘a worsening economic context, a lower increase…would need to be considered to mitigate against disemployment’.
“We now have that worsening economic context. Slowing economic growth, low business confidence, international trade tensions and now a global public health emergency.
“Firms will have declining revenues and won’t be able to sustain a 7 percent increase in labour costs. That’s before other costs like KiwiSaver are taken into account.
“As a result of Labour’s plainly ideological position, several thousand fewer workers will be in employment and will instead be on welfare.
“Jacinda Ardern and Grant Robertson should listen to their officials and to economists, give businesses a break and help keep New Zealand workers employed.”