I have undertaken cutting-edge statistical analysis of the Register of Pecuniary and Other Specified Interests of Members of Parliament, which has revealed some shocking information.
People of the following occupations are all extremely likely to own real property beyond the family home and Māori land interests:
Labour MP: 50%
National MP: 76.27%
Green MP: 50%
NZ First MP: 58.3% or 61.54%*
United Future MP: 100%
These rates are all extremely high – far higher than any ethnic or national group, for example. It is clear what we must do to curb property speculation and solve the housing crisis: Ban MPs from buying property in NZ.
*Info not available for new MP Ria Bond.
I’m a huge fan of minimum wage laws, which were introduced in NZ before any other nation-state, in 1894. Along with a good welfare safety net (remember when we had one of those? I don’t), they ensure employers can’t take advantage of prospective workers’ desperation to exploit their labour while paying them barely enough to survive, like upper classes have done for most of history and most of the world. They also put more money in the pockets of lower-income earners, which means more money circulating in the local economy, rather than the ‘trickle-down’ approach that directs more money to Swiss banks and Hawaiian holiday homes. All this is good for all workers, and good for society. As a Christian, I can’t help but agree that minimum wage laws as a necessary (though not sufficient) response to James 5:4-5, and enactment of Luke 6:20-21.
Employers and right-wingers often respond to the minimum wage (or proposed increases to it) in the same way they did to the abolition of slavery: countering that minimum wage laws end up hurting the people they mean to help, by making jobs unaffordable for employers, and therefore increasing unemployment. However, as the Sydney Morning Herald reports, most economists now agree that reasonable increases in the minimum wage don’t increase unemployment, and may even decrease it. They’ve found room in their theories to explain this, by observing that reality is more complex than their older models.
The SMH also offers plenty of real-life examples of minimum wage increases not increasing unemployment. New Zealand’s history, Treasury and Department of Labour corroborate this, as does recent US experience, various other research and this very rich man. The Living Wage movement adds evidence of employers actually getting more value for each wage dollar by paying employees better, as their staff are healthier, less likely to need long hours or second jobs, more loyal to their workplaces, better-motivated and often more productive. New Zealand has notoriously low productivity, so higher wages may help improve this.
If the old, baseless myths of minimum wages harming workers and employers are cast aside, there remains no economic or ethical justification for a minimum wage below a living wage, “the income necessary to provide workers and their families with the basic necessities of life” and “enable workers to live with dignity and to participate as active citizens in society.” The living wage is currently calculated at $18.80 per hour.
I thought it would be useful to survey the various political parties’ policies and past records on the minimum wage and/or Living Wage, to see what each of them may do if in power after September the 20th.
There’s some quite significant differences, which I’ve roughly quantified in scores out of ten for the sake of TL;DR readers who probably haven’t read this far anyway.
The parties on minimum wage
Alongside the below, please note that Bryan Bruce recently asked all parties “whether they would or would not support in principle the introduction of a living wage rather than a minimum wage.” “The Green Party, Labour, Mana, Maori Party. Alliance and Internet Party said Yes they would. ACT, United Future, Conservative Party, Democrats For Social Credit said No. NZ First gave no answer, while Bill English for National refused to answer saying the question was hypothetical.”
Policy: National typically don’t campaign on policy, and they have barely have any policy on their website compared to every other party – including nothing on the minimum wage. We can assume current trends will continue.
Past record: The 1990s National-led government was famously committed to lowering, not raising wages, due to similar beliefs to the minimum wage myths discussed above. They let it stagnate except when NZ First forced them to increase it in 1997 (nice graph here), and left it in 1999 at about 40% of the average wage. The current National-led government have done better; they’ve maintained it basically where Labour left it in 2008 – around 50% of average wage. They’ve increased it gradually, though much slower than the last Labour-led government – 18.75% in six years (just above inflation) compared to 71.43% in nine years (considerably above inflation; they also introduced Working for Families – see below). Their latest increase has been the highest – 50c to $14.25. They promote this a lot in their media releases. If their ‘status quo’ policy continues, it will further increase inequality, because it’s well out of step with economic growth.
National also re-introduced lower minimum wages for young and new employees, because of the minimum wage myth that it would increase youth employment. This bill passed with the support of ACT and United Future, with all other parties opposing.
Policy: Labour have a clear policy to “Increase the minimum wage by $2 an hour in our first year,to $15 an hour in our first hundred days in government, and increased [sic] again to $16.25 an hour in early 2015.” They will also “Set a target of returning the minimum wage to two-thirds of the average wage by the end of our second term, as economic conditions allow,” noting that the minimum wage “averaged around two-thirds of the average wage in the post-War period until the policies of Muldoon, followed by the neoliberal period, slashed it to just 40% of the average wage by 1999. The sixth Labour government brought it up to half of the average wage, but it has flat-lined since then.”
They also intend to reform employment law to be more in the interests of workers, and support the Living Wage movement in a number of ways: they’ll “Ensure that all core public service workers are paid at least the Living Wage, and extend this as fiscal conditions permit,” favour private sector firms who pay living wages, and “progressively address inequities in the pay of the publicly-funded aged care and disability care workforce and non-teaching staff in … schools.” The latter would be great for our huge numbers of hard-working, poorly-paid aged-care workers. Anecdotally, I’ve heard that government subsidies are currently not enough for rest homes to pay their staff a living wage.
Past record: While the fourth Labour government kick-started “the neoliberal period” they mention in their policy, the last (Clark) Labour-led government raised the minimum wage much faster than inflation, and much faster than the current National-led government, as mentioned. They also introduced Working for Families to top up sub-living wages with government subsidies – John Key called this “communism by stealth” at the time but now supports maintaining it rather than making employers pay more. They also passed a diluted version of Sue Bradford’s bill for youth to receive the same minimum wage as older adults, which National have essentially reversed (see above).
Policy: The Greens’ policy is to “increase the minimum wage and ensure it cannot fall below 66% of the average wage.” 66% of the average would translate to $17.16 as of a year ago, but as a friend pointed out, raising the minimum wage would also raise the average, so the final figure would be higher than that – it would take a smarter statistical mind than mine to give you a firm figure. The advantage of a relative measure is it deals with the material, absolute effects of inequality, as well as the material effects of poverty. Superannuation is indexed to average wages, and I think it’s a good idea for the minimum wage to be also. The Greens also say they are “committed to full employment with dignity and a living income, and reject the idea that economic stability requires either a significant level of unemployment or a low level of protection for those in the paid workforce.”
Past record: Former Green MP Sue Bradford led the charge for youth to receive the same minimum wage as adults, and the Labour-led government passed a version of this. Contrary to what right-wing bloggers and politicians say, it didn’t cause any adverse affect to youth employment; in fact it decreased youth inactivity.
Policy: Their policy is to raise the minimum wage to $16 “in the first instance.” It’s not clear what would happen next; Winston Peters has previously said that after an initial raise they will “then add margins for skill and good service,” which isn’t particularly clear either. This lack of clarity means I’ve given them a score below Labour’s, despite their increase being higher until April 2015. They’ll also make employment law better for workers, and reverse National’s policy of lower minimum wages for young workers, preferring a more constructive policy of “subsidizing wages for employers who take on young, unemployed people for trade training and skills programmes.”
Past record: In their confidence and supply agreement with Labour in 2005, NZ First asked Labour to “continue the practice of annually increasing the minimum wage, with a view to it being set at $12.00 per hour by the end of 2008,” which happened. Also, the only significant increase to the minimum wage in the 1990s National-led government was prompted by NZ First. All their media releases on the minimum wage advocate for raising it (or oppose reintroducing the youth rate), and in a speech to the Combined Trade Unions Peters boasts that “New Zealand First has supported every increase in the minimum wage.”
Policy: The policy section of their website hasn’t been updated for this election, and suggests raising the minimum wage to $16 as of 2011. More recently, they announced a policy of raising the minimum wage to the calculated living wage of $18.80. The Living Wage movement’s figure, which is updated each year, is based mostly on absolute measures. The advantage of this is that it deals with the material necessities of living a full life in society, can’t be written off as “merely relative” – though of course this writing-off misses the point spectacularly.
Past record: They haven’t let their role in National-led government blunt their criticism of its slow increases in the minimum wage, saying “The Government should be ashamed of themselves” for raising it a mere 25c to $13.75 in 2013. In the same release, they described “the increase in income inequality over the last 25 years as a major threat to our economic well-being and social cohesion,” and said “The Government should focus on reducing wage inequality by targeting high wages of excessively high income earners” as well as increasing the minimum wage.
Policy: Mana’s policy is to “Increase the minimum wage to $18.80 per hour (a living wage) and index it at 66% of the average wage to ensure it remains a living wage.” This combines the advantages of the Māori party policy (combating material deprivation by adopting a living wage) and the Green Party policy (combating the material affects of inequality and relative poverty by ensuring the minimum wage never goes below 66% of the average wage). Their economic justice, livelihoods and social wellbeing policies also include many other ways to “Raise the incomes of low-income earners,” including better protection for workers, working towards full employment by creating community service jobs for the unemployed, reversing National’s lower minimum wages for youth, finally increasing welfare support from the poverty-level it’s been at since 1991, abolishing GST which disproportionately impacts on the poor, and working towards a Universal Basic Income, as recommended by Gareth Morgan.
Past record: Mana is only three years old as a party, so their main past record has been advocating for the last three years for a higher minimum wage, and opposing the reduction of the minimum wage for young and new workers.
Policy: If ACT had their way, minimum wage laws would be “gone by lunchtime” (to quote their former leader on NZ’s nuclear-free stance). This is part of their welfare [or lack thereof] policy, which they note would be a continuation of the current government’s approach to welfare. It’s interesting that even though the minimum wage is not about benefits, but work, ACT lump it under welfare policy – presumably because it goes to poor people, not rich people.
Past record: All their releases on the minimum wage advocate for lowering it, oppose raising it, or oppose it altogether. They successfully lobbied National to have it lowered for young and new workers. They frequently repeat the minimum wage myths discussed above; that minimum wages are a “barrier to unemployment,” and that a “myth that minimum wages protect the poor.”
2/10: Seems to support the status quo, whatever that might be
Policy: The policy section of their website is in progress, and mostly still lists 2011 policy. I can’t find anything on their 2011 policy or even their media releases on minimum wage, except for saying they’d require “foreign charter vessels … compl[y] with New Zealand minimum wage laws and labour conditions,” which is a good and much-needed policy.
Past record: United Future have been confidence and supply partners of both the last National government and the last Labour government, and from what I can tell, they’ve supported what both their big sisters have done, despite the contradictions. This news report clarifies what I couldn’t find in their 2011 policy: they didn’t support a higher minimum wage last election (not sure about since). Last year, Peter Dunne’s one vote allowed National’s lower minimum wage for young and new workers to pass.
Policy: Their policies are still in progress, and I can find barely anything even being discussed on their policy forum and/or policy incubator – I found a few comments here, which aren’t too encouraging. Ironically, their media releases lack the basic internet feature of a search function, so I’m finding it hard to see if they’ve even mentioned the minimum wage anywhere (except for this release from Hone Harawira on behalf of Internet Mana). Perhaps the most solid statements they’ve made are one-off responses to questions: their affirmative response to Bryan Bruce’s Living Wage question above, Bruce’s other questions and #3-ranked candidate (#6 in Internet Mana) Miriam Pierard’s strong response to bFM on inequality.
Past record: Since they don’t even have policy yet, they certainly don’t have a past record. I suppose Kim Dotcom’s past record is worth mentioning; though here’s another perspective on it. In any case, while Dotcom does have a largely undefined “oversight” role, there are plenty of others involved in shaping policy: candidates, members and even to some extent the Mana party.
Policy: I only found one thing about the minimum wage on their website; it’s an undated response from Colin Craig to a reader’s question about the living wage and unions. Craig’s answer shows he believes in minimum wage myths as much as “tough on crime” myths, but it also clarifies his policy, which is to “increase the [non-existent] tax free threshold to $25,000” [now $20,000, and with an undefined flat tax after that] instead of raising the minimum wage.
A tax-free threshold would be great for low-income earners (and is one of the few policies the Conservatives have in common with Mana), but isn’t really a substitute for fairer wages. Quick calculations show if there was flat tax of 20% above $20,000, a minimum wage worker would end up with the equivalent of about $15.50 per hour on current tax rates (though presumably less public services). If it was 30% flat tax, they’d end up with the equivalent of $15/hr on current tax rates. If it was 40% (unlikely, given their low tax rhetoric), they’d end up with basically the same net wages as now.
Past record: I can’t find anything apart from the above.
Scores/10 according to me:
NZ First: 6.5
United Future: 2
EDIT (August 2015)
I’ve made a table showing how quickly the last three governments have raised the minimum wage.
In the last few days, many have noted National’s blatant self-interest in ignoring the Electoral Commission and maintaining the MMP status quo. The Commission suggested lowering the threshold to 4% and removing the “coat-tailing” exception, but National refused to do so because they wanted to continue having cups of tea with John Banks, Peter Dunne and (if needs be) Colin Craig. And now their chickens are coming home to roost with the Internet Mana strategic alliance. (In theory, the Conservatives and ACT could follow suit – but I’d argue there’s less common ground between Jamie Whyte and Colin Craig than between Kim Dotcom and Hone Harawira)
Certain Labour members (edit: though not Louisa Wall) are taking a far more critical view of coat-tailing and strategic use thereof. Many have (rightly) criticised Labour for being anti-strategic, anti-small-parties and anti-anyone-further-left-than-them. Some have also (wrongly) suggested they’re hypocrites for not consistently criticising “coat-tailers” on the left and right. In fact, they are consistently criticising coat-tailers – condemning both Epsom and the Internet Mana alliance as “rort[s] of the system,” “ruse[s]” and “scam[s],” and proposing to get rid of the rule that allows them.
So they’re not being inconsistent. But they are being hypocritical, by condemning coat-tailers in the first place – for at least four reasons.
They’ll no doubt say the difference is voters “genuinely liked” Jim Anderton (and their ex-buddy Peter Dunne), whereas Epsom voters only vote for the ACT candidate because they want to see his party represented. Perhaps this is true. But under First Past the Post, millions of voters across the country voted for Labour candidates not because they liked the candidate, but because they wanted to see the party represented. And still under MMP, many Green/Mana/etc supporters vote for Labour local candidates because they prefer a Labour local MP to the only other realistic alternative.
So they’re also hypocritical because they’re happy for Labour voters in Wigram or Green voters in Wellington Central to vote strategically for another party’s candidate, but not National voters in Epsom (or Labour voters in Te Tai Tokerau, for that matter).
Thirdly, they’re hypocritical because they call the “cup of tea” strategy a “rort” and in the very same press release endorse their own “reverse cup of tea” strategy: Labour voters voting for National’s Paul Goldsmith in Epsom. The only way this can possibly be ethically coherent is if they see all local seats as “rightfully” belonging to the same party that won the most party votes in that electorate (ie, always either National or Labour)… but in that case they’d have to give up most of their 22 electorate seats from the last election (some examples). And, of course, it would be pointless having a two-tick system if that was how it worked.
Lastly, they’re hypocritical because what is a political party but a strategic alliance of disparate factions and individuals, with some common purposes, banding together to pursue those purposes in elections and government? There’s at least as much diversity of views within Labour or National as there is between the Internet Party and Mana, and considerably more in-fighting (so far). But Labour have inherited a respectable and safe “major party” status that will never be described as an unholy “rort,” due the historical accident of being descended from a party that once represented the labour movement. This means that by condemning Internet Mana, they’re condemning a “sin” they’re not “tempted” by. Like National but unlike anyone else, they’ve never had to work doubly-hard for each vote, by first convincing potential voters a vote for them won’t be wasted. They’ve never had to resort to creative MMP strategies to provide this assurance. Blinding themselves to the privilege the system gives them, they blame the parties the system doesn’t privilege for taking the opportunities available to them.
Fixing the real problem
These days, Anderton is representing a dead fake building instead of Wigram, and Dunne is serving casinos instead of Clark… there’s no small parties left Labour actually likes. So, very nobly, they’re proposing to enact the Electoral Commission’s suggestions if elected.
But these high-minded condemnations and proposed solutions misdiagnose the problem entirely. The problem is that the threshold built into our MMP system stops it being truly proportional. It stacks the system against small and new parties, threatening to waste their votes and making them work far harder for them… thus creating the need and incentive for the so-called “rort” strategies.
That won’t change by getting rid of the coat-tailing exception, or even by lowering the threshold from 5% to 4%. We’d still have small parties banding together – only they’d be doing it to get across the 5% (or 4%) threshold, like the original Alliance. And we’d still have artificially skewed results – like the Labour voters who vote NZ First to make sure they get above 5% (or 4%), or the voters who shy away from small parties because they’re worried they won’t reach 5% (or 4%), often leading to a self-fulfilling prophecy.
The only way to stop disadvantaging small parties and incentivising “dodgy deals” is something neither National, Labour or the Electoral Commission suggest, but the most evidence-based/least reactionary submitters, international experts and bloggers across the political spectrum do: make MMP fully and straightforwardly proportional, by eradicating the threshold system that causes these problems in the first place. 1% of the votes, 1% of the seats – end of story. No need for the controversial coat-tailing exception, nobody’s vote robbed of effect because the party wasn’t big enough, and no need for creative strategies to negotiate coat-tailing versus wastage.
The Electoral Commission acknowledge that lowering or abolishing the threshold “would be a solution more consistent with the principle of proportionality that underpins the MMP system”… the only reason they won’t do it is because of a fear of a “proliferation of small parties.” Yes; you read that right; a supposedly independent commission are biased towards large parties, considering them “safer” than small parties; even though there’s no evidence high thresholds or few parties brings stability. And, of course, both big parties agree with them – neither of them suggest lowering the threshold below 4%.
The stupid thing is, at the moment we do have a proliferation of small parties; but we also have a proliferation of the strategies Labour condemns, because that’s basically the only way small and new parties can get in. If the Electoral Commission get their way, there may be less opportunities for small parties and their strategies, but (as they admit!) this would come at the cost of true proportionality. Is this anti-democratic knee-jerk response and anti-proportional threshold rule really worth it?
Even Christian Right radio have reported this.
So why are Stuff ignoring it?
Instead they’ve only reported their own poll the next day. The results showed a more modest leftward shift (National down 1.1%, Labour down 0.3%, Greens up 1.1%, NZ First down 0.4%). But the reporting emphasises Labour’s failure to increase its support, and National’s resilience to maintain its support! They also speculate about future woes for Labour, heap praise on the Conservative party and don’t mention the Greens’ rise.
Why does poll reporting matter? In 2011 we had the lowest election turn-out since the 1880s after the media told us constantly for 3 years that John Key was wildly popular and the election was a no-contest.
It’s been obvious for a while that Stuff loves John Key as much as Cut Your Hair
hates fundamentally disagrees with him. But you could have attributed that to an uncritical, stupid, lowest-common-denominator corporate ‘political’ media caring more for cults of personality than politics.
(PS: Even with their bias, Stuff seem quite critical of the GCSB bill, and their poll shows three-quarters of us are worried about it.
PPS: With one-seat majorities for such important legislation, the election definitely wasn’t a no-contest.)
You’ve probably noticed there’s been a groundswell of awareness, dismay and outrage about child poverty lately, particularly since the Children’s Commissioner convened a panel of experts to come up with suggestions about how to solve it. This could be a great opportunity for this government to create a positive legacy by actually doing something in response to the countless statistics and stories of poverty emerging in New Zealand over the last twenty-five or thirty years.
In fact, if they wanted to, this government could actually do a lot more about child poverty than a Labour government could… they wouldn’t have to worry about a right-wing opposition lambasting them for nanny-state-taxpayer-money-wasting-social-engineering (well, except John Banks, when he turns up). They could take significant action, even expensive action, without damaging their political reputation – they may well improve it by showing a more compassionate face.
So, win-win, right? Well, let’s have a look at how they’ve responded so far to the main recommendations from the Expert Advisory group on child poverty…
“Six of the best ideas for change“ (Andrew Laxon, The New Zealand Herald 06/10/2012)
1. Free meals in schools
This was Mana policy in the last election; since then it’s become John Campbell’s hobby horse and Labour policy. Actually, I recently learned that John Key signalled support for measures like this in 2007, saying National would start organising businesses to fund meals in poor schools while in opposition, rather than waiting to be in government.
Now that they’re in government, Bill English, chair of the ministerial committee on poverty, has said that children are going hungry because they’re in “homes where there is not a strong sense of responsibility”; but that it’s the responsibility of the whole society to “do something about that”. It’s hard to know what this means; but he has signaled that he’s open to the idea of providing meals in schools. However, his press secretary hastened to add that “no new decisions have been made“. Both have been busily citing statistics to show that kids going without meals isn’t as widespread as we think, so I don’t think we should be too hopeful too soon.
2. A warrant of fitness for all rental housing
John Key hasn’t exactly embraced this wholeheartedly, but he hasn’t completely ruled it out, saying “There’s probably some limits to what Government can do but we may be able to encourage landlords to increase the quality of their property.” Bill English is arguably even more interested, though worried it will push housing prices up. Again, let’s wait and see… no ‘new decisions’ yet.
3. Every child enrolled with health and social services at birth
They’re actually doing some stuff along these lines, but only for beneficiaries. By not extending these “social obligations” to everyone, and by adding sanctions without increasing support or availability, they can’t avoid the suspicion that they’re more motivated by putting pressure on beneficiaries than helping children.
4. Universal child payment
We had something similar to this until 1991, and of course we still have universal payments to the elderly. It seems to be working, or at least helping people who need help the least – 10% of the elderly are below the poverty line, while 25% of children are (up from 4% and 10% respectively in 1986). A welfare expert who visited the country recently said that international research reveals a child payment to be one of three key factors in reducing child poverty. He insisted that it needs to be universal, because “Programmes that are targeted to the poor tend to end up being poor programmes”. John Key’s response? He dismissed the idea as “dopey“.
5. Pass on child support payments to beneficiary solo parents rather than withholding it to offset their benefit.
6. Poverty reduction targets to make politicians accountable
Paula Bennett won’t even measure child poverty, and Bill English is following suit by refusing to set targets to reduce it. He reckons it’s meaningless to measure child poverty, because he thinks we only have ‘relative’ poverty, and that ‘relative’ poverty is not real poverty. Those are a couple of huge assumptions, which I’ll discuss in
my next blog a future blog, about the suggestion that there is no poverty in New Zealand.
Scorecard so far:
Vague and equivocal support, with a possibility of eventual action: 2.5/6
So, overall, it’s not looking good.
Particularly when we bear in mind that these are relatively conservative and non-partisan suggestions. That international welfare expert identified three key factors in reducing child poverty: increased parental employment and higher wages, along with the “dopey” universal child payment. The above recommendations are far gentler, and don’t require National to change their underlying philosophy at all – they could implement all of the above without having to actually create jobs or pay living wages.
Whatever they end up doing or not doing, this government’s response to child poverty will be one of its key legacies. It will also have a huge impact on thousands of young lives – for better or worse.