OnPoint by Keith Ng

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OnPoint: Don’t let them eat cake

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  • Joe Wylie,

    umm spoilers don't help you do burnouts

    Right. Spoilers are for guys who haven't discovered penis gourds.

    flat earth • Since Jan 2007 • 4593 posts Report Reply

  • Sacha,

    Way to attract the right kind of curious googler, Joe. :)

    Ak • Since May 2008 • 19706 posts Report Reply

  • Gareth Ward,

    I presume the DoL paper that recommended the increase to $12.50 had at least an assumptions-based analysis of the effect of that increase on employment numbers? Anyone seen it?

    Odd to quote myself but I looked around le blogosphere and the Standard had this linked from the last review.
    They're playing up that the report saw no loss of jobs if the minimum wage was increased inline with inflation. Of course, we are now in a very different employment market. Unfortunately it doesn't look the impact review behind their current suggestion is online.

    Auckland, NZ • Since Mar 2007 • 1727 posts Report Reply

  • Robyn Gallagher,

    Now it seems that the NZ meaning of the word has come to prevail.

    I'm reluctant to consider that meaning of hoon - as a young reckless driver - to originate from New Zealand. The Oxford English Dictionary has that usage dating back to a 1969 mention in a Brisbane newspaper.

    Raglan • Since Nov 2006 • 1946 posts Report Reply

  • Keith Ng,

    sagenz:

    I disagree about the desirability of more money for families also. The best thing that can be done is to bring forward infrastructure spending.

    Yes, but new jobs for fibre-optics technicians won't be terribly useful for poorly educated workers now, nor will, say, new building and road-works job be appropriate for many of those who'll be out of work. Infrastructure is great for creating jobs, of course, but there are heaps of people who won't benefit from it.

    Ben:

    Not increasing the minimum wage to keep some temporary employees in work and then making up for the non-increase by upping Working for Families payments for those who qualify (which will never happen under National anyway), just seems like an effort in shuffling the misfortune about... Surely we aren't going to survive this recession by having the poor weather the storm for the rest of us.

    It's not shuffling the misfortune about - it's shuffling who pays for it. With minimum wage, it's the employer. With WFF, it's the taxpayer. It's businesses who are most fragile right now, and it doesn't make sense to put the pressure on them.

    Auckland • Since Nov 2006 • 543 posts Report Reply

  • Julian Melville,

    A far-north-NSW term for hoon that I quite liked was "cog". It's short and sharp and sounds cool. Unfortunately I've never heard it used outside Lismore. Not sure if it's from QLD though.

    Auckland • Since Dec 2006 • 200 posts Report Reply

  • giovanni tiso,

    Infrastructure is great for creating jobs, of course, but there are heaps of people who won't benefit from it.

    Do we have expectations of which sectors will be shedding more jobs? Are we sure it's going to be the people on the lower rungs that will be hit the most?

    Wellington • Since Jun 2007 • 7473 posts Report Reply

  • LegBreak,

    One solution on how to punish the Boy Racers / hoons would be to imprison them for a night inside the forthcoming Coldplay concert.

    Wellington • Since Nov 2006 • 1162 posts Report Reply

  • Zippy Gonzales,

    You see hoons. I see frustrated engineers.

    Wellington • Since Nov 2006 • 186 posts Report Reply

  • Steve Barnes,

    Infrastructure is great for creating jobs, of course, but there are heaps of people who won't benefit from it.

    Not exactly "heaps". Govt. expenditure on infrastructure allows money to filter out into the wider community without costing the country, as a whole, a great deal. This increases the tax tack and in turn gives the Govt. more money for infrastructure. It is a money go round. It may not increase GDP but stimulates internal trade in goods and services. The more the money moves the greater its apparent value becomes. The momentum of an economy is, almost, as important as its actual value.

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • Steve Barnes,

    Doh. Tax Take. gggrrrr edit button.

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • Conal Tuohy,

    People on the minimum wage are "relatively expensive"? How can this be?

    Melbourne • Since Oct 2008 • 14 posts Report Reply

  • Steve Barnes,

    You see hoons. I see frustrated engineers.

    There's a difference? Have you been to an engineering Dept. party at Auckland Uni. ?

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • Steve Barnes,

    People on the minimum wage are "relatively expensive"? How can this be?

    If you have reletives on the minimum wage, you'll understand.
    ;-)

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • Gareth Ward,

    Apparently it's not the minimum wage that's affecting our economic growth - it's our Prime Minister:
    Mr Key said... "I had led to uncertainty around developments and stalled projects, including those of national importance."

    http://www.stuff.co.nz/4836545a13.html

    Auckland, NZ • Since Mar 2007 • 1727 posts Report Reply

  • Don Christie,

    I guess productivity is up though.

    I always laugh when our productivity is compared to France. They have had unemployment running at 8 to 12% for the last 10 years at least, ours has been 3.5%.

    Now that overtime and unemployment is going up our productivity stats will start looking better.

    Metrics, bah.

    Wellington • Since Nov 2006 • 1645 posts Report Reply

  • Keith Ng,

    Gareth:

    [The Standard are] playing up that the report saw no loss of jobs if the minimum wage was increased inline with inflation. Of course, we are now in a very different employment market.

    As you say, things have changed an awful lot in the past year or so.

    In particular, there was little excess capacity in the economy in 2007. That's one of the reasons why the predicted impact of a rise in the minimum wage was so minimal - employers had plenty of orders to fill, business to be done, and not enough people to do them. At times like that, employers would just suck it up and pay more. Now it's the opposite.

    giovanni:

    Do we have expectations of which sectors will be shedding more jobs? Are we sure it's going to be the people on the lower rungs that will be hit the most?

    Industries: Construction, export, etc. Which translates into builders, construction workers, farmhands, seasonal workers, etc. But it's not just limited to industries - the flow on effect will hit other sectors, and the first to go are the flexible staff - who tend to be low-income.

    They're the most likely to have flexible contracts, most likely to be direct service providers (e.g. If you have fewer customers, you need fewer call centre staff, but you still need as many marketing managers), have least training, specialist skills and institutional knowledge (and are therefore more replaceable)... and so forth. That's why they're usually the first to go.

    Auckland • Since Nov 2006 • 543 posts Report Reply

  • Kumara Republic,

    In countries like France, manual workers have typically been replaced by machines, which explain both the high rates of productivity and unemployment. By and large unemployment in France was kept under the carpet - until the molotovs started flying, not once, but twice.

    The southernmost capital … • Since Nov 2006 • 5429 posts Report Reply

  • Keith Ng,

    Not exactly "heaps". Govt. expenditure on infrastructure allows money to filter out into the wider community without costing the country, as a whole, a great deal. This increases the tax tack and in turn gives the Govt. more money for infrastructure. It is a money go round.

    No such thing as free money. Your scenario only works if you assume that *everyone* who works on infrastructure would otherwise have been unemployed. If they were employed, they would have been paying taxes anyway, so you can't count their tax take as "new" revenue.

    Also, it wouldn't go very far. Let's make a generous estimate, and say that 80% of an infrastructure project's cost is domestic labour. Let's say those labour pay back 20% of it as tax and spend the rest. You're down to 16% of the original. Of the spending, much of it will be spent on imported goods, the rest will be sloshed through the same process. You'll have to be generous to estimate that even 50% of the cost of the project will eventually (over a pretty long period of time) come back as tax revenue.

    The projects themselves have a value, of course. But the indirect benefit that a cleaner in Christchurch receives from roads in Auckland is pretty bloody indirect. Sometimes, spending money is just spending money.

    Auckland • Since Nov 2006 • 543 posts Report Reply

  • Don Christie,

    In countries like France,

    The economy and rules around doing business are *so* rigid it is surprising they even have an economy...

    I suspect mechanisation rates between France and NZ are not so different but have no proof of that. They subsidise an inefficient rural sector which soaks up manual labour.

    Wellington • Since Nov 2006 • 1645 posts Report Reply

  • Ben Chapman,

    It's not shuffling the misfortune about - it's shuffling who pays for it. With minimum wage, it's the employer. With WFF, it's the taxpayer. It's businesses who are most fragile right now, and it doesn't make sense to put the pressure on them.

    I see your point, but I think mine is still valid. Regardless of who is paying, in one case the jobs of temporary minimum-wage employers are at risk, in the other it is the relative income of minimum-wage workers who do not qualify for Working for Families.

    If anything, a tax cut for the lower brackets would be better relief for minimum-wage workers, but there is as little chance of that happening under this government as there is for WfF to be beefed up.

    If you are going to use tax credits to address the danger of job losses, then perhaps a targeted tax break for businesses who retain workers should be considered.

    Wellington • Since Nov 2008 • 135 posts Report Reply

  • Kumara Republic,

    The projects themselves have a value, of course. But the indirect benefit that a cleaner in Christchurch receives from roads in Auckland is pretty bloody indirect. Sometimes, spending money is just spending money.

    And is there such a thing as an infrastructure project that would benefit the nation as a whole, rather than just a single region like Auckland or ChCh? In Britain 150 years ago it was the rail network, but it helped that they had the economy of scale for the task.

    The southernmost capital … • Since Nov 2006 • 5429 posts Report Reply

  • Don Christie,

    No such thing as free money.

    Oh, I wouldn't say that.

    It's just that sometimes there is more free money and sometimes less. We are in the latter situation right now and there is frighteningly little we can do about it...

    Wellington • Since Nov 2006 • 1645 posts Report Reply

  • Barbara,

    I may be wrong but don't the tax cuts affect those lower wages most. In this climate it would seem unfair to increase their tax burden, but not their income.

    I understand the comparison with Australia for minimum wage is just under $18 NZ.

    Sandringham • Since Mar 2008 • 33 posts Report Reply

  • Russell Brown,

    And is there such a thing as an infrastructure project that would benefit the nation as a whole, rather than just a single region like Auckland or ChCh? In Britain 150 years ago it was the rail network, but it helped that they had the economy of scale for the task.

    Well, that nationwide ultra-broadband network should help -- as expressed, it speaks to your request, because it's not driven by local demand but by public policy. (Yes, it was seriously socialist.)

    But things have gone very quiet on that front since the election, and since Maurice Williamson's exit from IT.

    I don't seriously expect it to emerge in anything like the form it had in National's manifesto. (Although it was amusing seeing Treasury rail against Labour's contestable funding model in its briefing to the new government. Wha'?)

    But whatever happened to Internet NZ's major-party policy comparison on broadband? The report that was supposed to come out before the election?

    Auckland • Since Nov 2006 • 22825 posts Report Reply

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