So; Labour is promising to raise the minimum wage to $15.00 per hour in its first year if elected in November.
It sounds good for Labour's constituency, and it was met with resounding applause at Labour's congress in Wellington today. But is a minimum wage of $15/hr sustainable in the current economic climate? We seriously doubt it.
Lifting the minimum wage from $13/hour to $15/hour in one fell swoop is an increase of 15.4%. For small businesses who have already endured three very tough years, it could well be the last straw. Businesses will either go to the wall, unable to meet their wage bills, or they will stop hiring. Whichever, having such a burden imposed on them will be counterproductive.
Not that Labour will care. Phil Goff is going to promise anything if he believes that there is electoral advantage in it. He forgets that the New Zealand economy is hugely reliant on the contribution of small businesses; but it is small business that will have to bear the cost of this sop by Phil Goff to his trade union backers.