Minimum Wage Amendment Bill

It is a great pleasure to speak in support of my colleague’s bill, the Minimum Wage Amendment Bill, which would take the minimum wage to $15 an hour by 1 April next year. I found the previous speaker’s speech quite interesting and typical, in a way. I would like him to explain to those miners in Huntly who have lost their jobs what raising the minimum wage has got to do with them losing their jobs. It has got nothing to do with that. It has got everything to do with the fact that this Government has absolutely no idea about how to create real, well-paid jobs. It is just full of slogans, full of plans, full of targets, and we are sick of hearing them.

Tonight we have made history in this Parliament with the first reading of my colleague Louisa Wall’s bill, the Marriage (Definition of Marriage) Amendment Bill. That bill is about an injustice that needs to be righted. The bill will go through the select committee process and I am sure it will come back and get through its third reading in the same spirit that we saw tonight. This bill is about an injustice, as well. I want to talk about some real people who are on the minimum wage, and, actually, they are not too far away from us. They are probably up in members’ offices right now, or after midnight, cleaning their offices. They are cleaning out their rubbish bins, cleaning the toilets, wandering around after members, making sure that the mess that David Bennett left behind is cleaned up, so that when he gets back to work the next day his office is sparkling clean.

We met with those cleaners just a couple of weeks ago. Those cleaners, 28 of them, who work in this Parliament are on the minimum wage. That is shameful.

💬 Andrew Little: Embarrassing.

That is embarrassing. This House of the people is satisfied to allow the cleaners of this place to remain on the minimum wage. What is more, they get only 30 hours a week, so it is not even a full-time job. Most of them are working more than one job. We talked to them. Their ambitions—apart from wanting to feed their families, put food on the table, and those sorts of things—are not for themselves but for their children. It is for their children’s education. Jane, the Prime Minister’s cleaner, who gets $14 an hour because she is the supervisor, and she is in her 60s now, works two jobs. She is really tired. She has now brought her son in to help her, because of the hours and the work she has do. She talked about the ambitions that she has for her children and grandchildren, and how she wanted to be paid $15 an hour so that she could meet those ambitions and help her children at school when they have to pay for things like sports and so on. She wanted to be able to help them with that. They are not being selfish about this. These are real people who work in this place, and they are not the only minimum wage people in this place. Talk to one of the catering workers some time and see what they are paid.

In a place where all of us are very privileged, and we all get paid well, tonight the National Government is about to vote down a bill that would give those cleaners and those catering workers—those minimum wage workers—$60 a week. For us, $60 a week is not that much; for them, it is a huge amount. We have spent a lot of time this week talking about poverty and inequality, and we are seeing the impact of that. We know that inequality is growing. We know that there is poverty in many of our families and that, actually, two out of every five families that are working are living in poverty. Their children are living in poverty. Those families are working but they are not earning enough to make ends meet. This is a simple measure. This is a simple measure that would cost almost nothing to give the cleaners in this place $15 an hour. In fact, it is something like $50,000 a year. That is nothing. We could do this. We could do it in the spirit in which we passed the bill earlier in the evening, where we saw an injustice that needed to be righted. Yes, I know that it has got to go through the processes, but the spirit of this place was really memorable. Unfortunately, the spirit does not seem to continue when it comes to the National Government supporting low-paid workers and the cleaners who clean their office.

In my last speech in this House I found myself in agreement with 95 percent of the Labour Party on a Labour bill, the Marriage (Definition of Marriage) Amendment Bill. I hope our friends on the other side are not expecting too much of that from me. We are about to return to business as usual. I cannot find myself supporting this bill from the Labour Party, the Minimum Wage Amendment Bill, for many of the reasons that my colleague David Bennett outlined and that I would like to outline tonight, as well.

When Labour was in Government it was doing the right thing on the minimum wage. Trevor Mallard, I understand it was, actually ended up rejecting a $15 minimum wage. Labour’s policy along the way has always been to increase the minimum wage only at a rate to maintain its purchasing power.

💬 Hon Tony Ryall: Was that during the good years they rejected that?

During the good years. Now that we are in a lot of strife, we are struggling, and we have had the global financial crisis—

💬 Hon Tony Ryall: Who was that who rejected that?

Trevor Mallard, I am told. Trevor Mallard actually opposed a $15 minimum wage, because Labour knew that if you were to automatically bump up the minimum wage to a higher level, to $15 an hour, without doing it gradually, you would actually create greater unemployment.

We hear quite often from members on the other side that they believe that unemployment is far too high, and, yes, we would probably agree that unemployment is too high. We have got plans and we have got policies that are leading to more jobs being created, but I have to say that if you are of the belief that unemployment is too high, the last thing you would be doing is implementing a policy that would immediately price 5,500 workers out of the job market. That is exactly what would happen. By increasing the minimum wage to $15 an hour, in one fell swoop 5,500 people, we are told, would end up on the unemployment heap. I do not believe that that is appropriate, and I do not believe that what New Zealanders would want to see is 5,500 people being put on to the unemployment heap and being told that they are not able to work, because they have been priced out of the workforce by this Parliament.

We have got a very proud record on the minimum wage, and we are happy to share it. Under National, workers on the minimum wage are actually better off than they were under the last Government. If you take into account inflation, the after-tax income of someone on the minimum wage is 8 percent ahead of where it was 4 years ago under Labour. This works out to be more than $1,800 a year extra in the back pockets of the lowest-paid worker. [Interruption] I can go louder. I can go louder too, if you like.

New Zealand’s minimum wage is actually near the top of the OECD, relative to the average wage. If members on the other side of the House really do care about jobs, then they would actually be supporting a policy that we have got coming up very soon that would actually help more people get into work.

💬 Sue Moroney: What is it?

It is the starting out wage for young workers. We know that we have to provide opportunities for employers to take on people. The starting out wage for younger workers is in opposition to what we are talking about tonight, but that would actually lead to more people working and actually more people getting into the workforce, which is the most important issue. Getting people into the workforce is the most important issue. Pricing people out of the workforce is the last thing you should be doing. Members on the other side want to price people out of the workforce. We want to get more people into the workforce.

One of the policies that we have had that enabled more people to get into the workforce was our 90-day trials. Did we get support from the other side? Did we get support from the other side? No, we did not. But we do know that 13,000 extra jobs were created under that policy. Here we are with a policy that we have just implemented, which allowed 13,000 people to get jobs, and which allowed employers to take a risk on some people. Forty percent of employers told us that if it was not for the trial period, they would not have hired someone. The 13,000 jobs that were created there, and the jobs that will be created for younger workers with the starting out wage—that is what we believe in. Our opponents on the other side want to price people out of the workforce.

We believe in enabling people and giving people the best opportunity to get into the workforce. We believe in a sensible minimum wage policy, which we have followed for the last 4 years, that gradually increases the minimum wage to enable businesses to keep up and to enable us to put more money into the pockets of everyday New Zealanders, but at a gradual rate and a sensible rate. I do not support this bill. It should not be supported by this Parliament. It would lead to greater unemployment.

Tēnā koe, Mr Speaker. Tēnā koutou ki te Whare. The Green Party will be supporting this bill, the Minimum Wage Amendment Bill. A $15 minimum wage is actually our stated policy, and our policy also includes attaching the minimum wage to the average wage so that it is 66 percent of the average wage. The first minimum wage was introduced in around about 1945, and at that time it was about 80 percent of the average wage. Currently, the average wage is $27 an hour and the existing minimum wage is $13.50, which is about 40 percent of the average wage. If this bill is successful and a $15 minimum per hour rate is set, that would take it up to a mere 55 percent of the average wage.

Today in New Zealand 300,000 workers earn $13.50 an hour, the minimum wage. As we have heard from the Expert Advisory Group on Solutions to Child Poverty, there are 270,000 children in New Zealand living in poverty and two out of five of them come from families where at least one of the parents is in work. We heard again today from the Minister for Social Development, Paula Bennett, that the best way to raise these children out of poverty is for the parents to enter paid work, and we agree. But it has to be work that is paid for at a decent rate, and $13.50 is not it.

Parents struggle to feed, house, clothe, educate their kids, and keep them healthy when they are earning $13.50 an hour. Before tax that is $540 a week, and, yes, these families can access the in-work tax credit, which is a discrimination against the non-working poor, but this does not lift wages. It makes low-paid workers dependent on the State. The in-work tax credit is a subsidy to employers, and it allows them to continue to pay wages that are simply too low. It is a subsidy for employers, another deal for the well-off.

We have heard that increasing the minimum wage to $15 is hard on employers, that they cannot afford it. Well, we heard that argument in the 1970s when equal pay was introduced, and guess what—the world did not come to a halt. We heard it again when paid parental leave was introduced in the last decade, and, again, the economy did not crash to a halt. The fact of the matter is that wages have not kept up with the cost of living, and we cannot afford to keep our people poor, because it becomes an increasing drain on our economy. It is uneconomic in terms of health outcomes, in terms of education outcomes, and in terms of crime and antisocial behaviour, and we all pay for that.

Employers should be paying a decent pay rate. Over the last decade, productivity—the rate that workers are working at in New Zealand, what they are producing, and how much the employers are gaining from them—has increased dramatically, but wages have not increased at the same level. We are working harder than ever, but we are not being rewarded. We have not kept up with the cost of living. In the Dominion Post today they are predicting price increases linked to the drought in the US, which has an impact on the wheat crops, which means that in the coming months and years bread prices will be skyrocketing.

This bill is very modest. The call for an increase in the minimum wage is really very timely because tomorrow the Service and Food Workers Union, along with faith-based organisations and community organisations, are launching the Living Wage campaign. They will be calling on employers to commit to paying workers a living wage, basically. We do not know what that is, but in the National Business Review last week they suggested that a living wage was something like $17.70 an hour. We know that on the minimum wage as it is at the moment, workers—

The member’s time has expired. I am sorry to interrupt the honourable member but the time has come for me to leave the Chair.

Debate interrupted.

Sitting suspended from 10 p.m. to 9 a.m. (Thursday)