28 January 2009

Pay freeze will only intensify recession: Greens

A freeze on the minimum wage is the last thing our economy needs.

Calls by Business New Zealand for a nil minimum wage increase this year fly in the face of National's plans to pull our economy out of recession, Green Party Employment Spokesperson Sue Bradford says.

"The Department of Labour is reported to be recommending a 50c per hour increase.

"That's not a rise, it just compensates for inflation since last year.

"While this recommendation is abysmally low, it would be better than the nil increase Business New Zealand advocates, which would slash spending power for Kiwi families on low incomes.

"I understand Cabinet is due to consider this issue next Monday 2 February.

"The Green Party hopes that John Key and Bill English understand economics well enough to realise the last thing the Government should do in the current environment is push the value of workers' wages even lower.

"In a recession the most important thing is to maintain peoples' incomes so they can keep up even minimal buying power.

"Freezing the minimum wage is a recipe for further spending cuts by low paid workers, deeper poverty, more jobs being lost and an intensified recessionary spiral," Ms Bradford says.

"There is no evidence for the hoary old myth that raising the minimum wage causes unemployment.

"Nor is it just those who sit on the current minimum wage of $12 an hour who will be impacted by a minimum wage freeze - there are also a huge number of workers earning between $12 and $15 an hour whose pay rates tend to be heavily influenced by the minimum wage benchmark.

"The Green Party calls on the Government to take a fresh approach to the minimum wage when Cabinet meets next week, and make a decision based on social justice and sound economic principles, instead of making the mistakes of the 1990s all over again."

ENDS

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