Thursday, February 23, 2017


The Living Wage!!?

All the failures, The Soviet Union, Poland,  East Germany, Romania, Bulgaria, Albania, Greece, North Korea, and a latest socialist state to hit the wall, Venezuela, currently said to be in possession of untold wealth in oil reserves, tried to use state dictate to make it work.
It matters so little  to be measurable as to beneficial outcomes sought, yet socialists think it is a game changer.

An arbitrary hourly rate in excess of twenty dollars an hour is being promoted under Alice In Wonderland idiotic freekinomics, from Charlie Waldegrave, yet the cost in money, jobs, and social degradation has rarely been addressed in any analysis.

The exception that could have proved the truth came when Wellington City Council moved to embrace the crass stupidity with an old labour tusker voting for it while admitting he could not pay those same wage levels in his food outlet as it would destroy the viability of his business. Nobody noticed it seems.
Of course such negativity did not transfer to his support for the WCC with its fallback to ratepayer funding deficits, for councilors who were never going to have to confront such inconvenient economic reality, spending other peoples money.

So far I am unaware of any real functioning business that have embraced the lunacy totally unrelated to skills and abilities, and that is no surprise. However  the increasing acts of economic sabotage are increasing in numbers where those seeking to impress can pay for it with OPMs

Of course it is no secret that McDonald's fast food chain is looking to eliminate  its lower paid staff with increasing use of robots.  Some jobs are and never will be economically viable at an artificial rate of remuneration, it is not rocket science.
If such arbitrary setting of pay rates was such a great Idea why stop at $20.20, lets shoot for $50, after all if a Padre from The Hutt Valley is not to be challenged for his freekeconomics he must have it right, right, well maybe not.

Even at the minimum wage recently raised to nearly $16  not acknowledged as destroying the market that provides entry level jobs for those desiring to get work and prove employability, is  apparently not an issue when the centrist government is only looking at re-election, as were the various councillors  hellbent on a spiral to economic oblivion when electoral success is the only driver.
It will all work out, eh Mr McCawber.

Doesn't anybody in a position of economic responsibility not remember how Muldoon brought this well endowed country to the brink of insolvency with "wage price freezes'. Economoc lunacy that was only averted when the voters, with a spoiling run by Sir Robert Jones, handed the checkbook to Sir Roger Douglas, one of the more deserving of a knighthood, who averted disaster with fulsome support from many who later lost their bottle. Including the latest Economic Disaster who voters inexplicably handed the Greater Auckland Credit Cards to, who is now threatening his sheeple with a 16% rates increase.

The Jobs that become uneconomic will just disappear, Ratepayers dont matter, what is needed to make living affordable in Auckland has very little connection to what is needed in say depressed rural areas as payment for work, the only result will be growth in job seeker beneficiary numbers with an accompanying decline in the social advantages that accompany 'going to work'.

Of course such destructive lunacy that might have appeal to the ignorant, must gain traction in the publicity surrounding deserved rewards coming to a state servant who has managed a super fund to very satisfactory performance levels and being paid remuneration including bonuses that are so widely described as unacceptable, even by another highly paid public servant, current occupant of the 9th floor office in the Beehive.

No bloody idea.


David said...

Jesusonapogostick, you try hard to write such dense tripe.

Quite simply, when the lower paid get a wage rise all that money goes back in to economic activity. It doesn't go on yachts, Caribbean Islands and whores, it is spent on food, clothing, furniture, education, entertainment, thus increasing economic activity.

In March 2015 the minimum wage in Seattle was raised. All sorts of dire predictions, similar to yours above, but in clearer English, were made. Businesses would close. Jobs would be lost. The sky would fall.

All, of course, lies.

Seattle has prospered, unemployment down, economic activity up.

The unemployment rate in the city of Seattle – the tip of the spear when it comes to minimum wage experiments – has now hit a new cycle low of 3.4%, as the city continues to thrive. I’m not sure what else there is to say at this point. The doomsayers were wrong. The sky has not fallen. The restaurant business, by all accounts, is booming (in fact, probably reaching a saturation point when one looks at eateries per capita). I think it’s safe to say we’ve got enough data – over almost two years now – to declare that Seattle has not suffered adverse consequences from its increases in the minimum wage, and has certainly not experienced the dire effects foretold by the anti-min wage crowd.

Anonymous said...

What happens to those currently on $20.50 an hour ?
- they will want total upward parity.
This then moves through all payscales for any employer, so that the Mayor, for example, get a corresponding rise.
All it does in local Government is put up the never ending rates.
It will bankrupt many small businesses who already pay over the $20.50 per hour.
Typical Bloody Stupid Socialism.

The Veteran said...

David .... to use your words 'Jesusonapogostick' ... read the post and understand. GD is referring to the so called 'living wage' ... dreamed up by an Anglican cleric and calculated on the basis that the person receiving it has a spouse and two siblings to support. NZL has one of the highest 'minimum wage' regimes in the OECD and on 1 April it will increase to $15.75 per hour. To that you need to add in the the raft of additional government support available to low income earners including 'Working for Families' which can see low income households paying very little or no tax.

It is instructive that the move to implement the living wage is mainly restricted to the local government sector and socialist controlled councils. After-all, all they need to do is to jack the rates to pay for it. The bankruptcy of their decision making was no better illustrated when Wellington City Councillor Mark Peck, failed Labour MP and cafe owner, voted for its introduction but said he couldn't afford to apply it to his own business as it would go bust. And then we have the nice Mt Goff saying that in Auckland thyy would cover the cost through staff efficiencies ... is he saying he inherited an inefficient Council ... don't answer, the question is rhetorical. Staff efficiencies is the code word for 'not sure but we'll bury the cost somewhere'.

Advocates for the living wage fail to address the question of parity articulated by Anon above. Its introduction must feed through into all other wage rates and it becomes a never ending cycle. It is a sop to the socialist conscience but I note that even Parliamentary Labour Party has steered clear of advocating that it should replace the minimum wage ... why?

So spare me from your Seattle crap. This is NZL ... not the US of A. And read the post before you insert foot into mouth.

David said...

In further astonishing stupidity we read To that you need to add in the the raft of additional government support available to low income earners including 'Working for Families' which can see low income households paying very little or no tax.

In other words, the State, via the taxpayers, is subsidising businesses who wilfully under pay their staff knowing that the State, aka The taxpayers, will subsidise their employees. Funny how the right always rail against subsidies while stuffing their pockets with subsidised money.

The Veteran said...

David ... now you're REALLY being stupid. NZL (can't speak for your country) has a tax system that doesn't penalise success while recognising that some (depending on their individual circumstances) need a helping hand. It's fair comment that it's railed against by Neanderthals on both the left and right sides of the political divide which probably means Government has got it about right.

Educate me (if you can). The living wage is predicated on the assumption that the wage earner has to support a family of four (ages not specified). Are you seriously arguing that wage/salary rates should be set based on the size of ones family? ... spot the flaw ... it's not difficult.

Anonymous said...

Veteran......just a point that may have some bearing on the debate. You say NZ has one of the highest Minimum wage "regimes" in the world, it also has one of the highest cost of living "regimes" in the world.

The same arguments are taking place in the UK where employers are being subsidised by the Govt. through workers tax credits. When the Managing Director turns up in his new company Range Rover while paying under the national wage it breeds dissatisfaction and resentment.

We are now entering the "automation" era where governments now realise full employment is a pipe dream and are looking at universal benefit (graded) as a means of wealth distribution. If you read David's post correctly you can see the inherent unfairness of a system that uses tax to subsidise badly run or failing businesses.

A point made on this blog a while ago also has a bearing......the countries with the highest prison populations per capita also have the greatest wealth divide in society.

Lord Egbut

The Veteran said...

Egbut ... not sure where you are getting your numbers from but I'm looking at the Numbeo
cost comparison website comparing London (your most expensive city) with Auckland (ours). Their numbers ....

Consumer prices in Akl are 2.88% higher than London
Rent prices in Akl are 37.1% lower than London
Restaurant prices in Akl are are 15.47% lower than London
Grocery prices in Akl are 28.77% higher than London
Local purchasing power in Akl is 27.49% higher than in London

Your coloration between prison population and the wealth divide is a moot.

Anonymous said... have to factor in London weighting where salaries are deliberately raised across all the Govt and local authorities to a higher than national level. London is not UK and Paris is not France.

I suggest you compare Birmingham with Auckland or Whangarei with Taunton etc.

Lord Egbut

The Veteran said...

Milord ... you know and I both know there are lies, damn lies and statistics ... lets go outside London and compare Exeter with say Wellington:

Consumer prices in Exeter are 11.50% lower than Wellington
Rent prices in Exeter are 11.38% lower than Wellington
Restaurant prices in Exeter are 9.77% higher than Wellington
Grocery prices in Exeter are 22.3% lower than Wellington
Local purchasing power in Exeter is 39.21% lower than Wellington

It's the last one that really matters