“Media fact-checkers are letting Labour’s finance spokesperson get away with absurd claims about the minimum wage,” says ACT Leader David Seymour.
“Jacinda Ardern and Grant Robertson have repeated ad nauseam the claim that increasing the minimum wage will stimulate the economy because workers on the minimum wage are more likely to spend their income.
“But the economic experts at the Treasury have dealt a devastating blow to Labour’s main argument for lifting the minimum wage.
“Treasury says it won’t lift productivity, overall wage levels or job creation, and will harm our international competitiveness.
“In official advice on whether the minimum wage will lift economic growth, Treasury says:
- '…the minimum wage is not likely to be the driver of a step-change in either productivity growth or wages…'
- '…on rare occasions, the employment losses from lifting the minimum wage has been offset by employment gains from the increased consumer demand caused by minimum wage earners spending a high proportion of their earnings. However, for this to happen, the lift to consumer demand needs to be significant, the small number of people earning at or near the minimum wage makes this unlikely in New Zealand.'
- '…the minimum wage is not an effective tool for lifting wage levels overall.'
- '…an increase in the minimum wage that increased overall labour costs would reduce international competitiveness.'
“Increasing costs on small businesses during a recession is not a plan for economic recovery.
“Only ACT has a plan for a faster recovery with lower taxes and less debt.”
Read our plan here.