Tuesday, December 19, 2006

More Money

Minimum wages are set to incerase by $1, from $10.25 to $11.25 on April 1 next year. This is great news for unions and workers who have long been struggling to get a wage increase.

Although, I would have preferred Youth Rates to have been abolished, I am pleased that they too will get an increase with an 80c wage rise to $9 an hour.

I am slightly worried about how businesses may react to this, and therefore not employ unskilled workers and young people. However, there are plenty of jobs which skilled persons usually do not apply for and therefore I do not feel that there is suddenly going to a massive increase in the unemployment levels - as some people believe this is what will happen.

Hopefully under the Labour Government we will get a minimum wage of $12 an hour at the end of 2008, because chances of that happening under a National Government are slim to none.


Seamonkey Madness said...

"I am slightly worried about how businesses may react to this, and therefore not employ unskilled workers..."

Careful, this might make newspaper headlines... I can see it now:


Pamziewamzie said...

Everyone starts off unskilled you know...

Seamonkey Madness said...

I guess so Pam.

One could presume that a potential employee would have a proclivity for their chosen industry and would gain skill within the first few months of working.

That said, if Worker X does not improve his skillset by a measurable amount in lets say three months, would the employer then be justified in either reducing the workers pay or firing them altogether?

Heine said...

Wouldn't be profitable to hire anybody unskilled if it means paying them that much per hour.

I would be most interested to see how this will affect businesses hiring more people or retaining present staffing levels.

I understand how "nice" and "fluffy" this policy looks on paper... but we have to look at this from the side of employers too. Labour has already added other taxes and red tape costs to business already, I'd hate to be a small to middle sized business owner.

Peter McK said...

so now with the minimum wage $11.25 per hours it has now approached th epoint where instead of paying people to do certain jobs (from babysitting to work around the house) i will not employ them as the cost is simply too much for the economic benefit derived. I will go out less and therefore the budget restaurant will not get my business, the picture theatre will not get my custom and so on.

People need to be paid according to the economic benefit they contribute and market demand for their services. There is also the comparative arguement - the lowest paid workers getting a 9.8% pay increase will mean other workers who are paid slightly more - but bring more skills / maturity / production to the job will also demand more money - I wonder where the break point is -

if the economy flattens then what will the impact be - at a time when the economy is running along nicely market demand and wage demand may mean there will be little impact - but what happens if the market turns and the cost of labour drops - what will be the impact at the bottom of the heap?

and if a high minimum wage is going to deter employers form employing unskiled labour - (above the economic contribution and worth) then aren't the unskilled workers the real losers?