What the Hell are you on about?

Trying to decipher the sh*t politicians say

Welcome to a new series on Emily Writes Weekly. It’s called What the fuck are you TALKING about. The title comes from what I scream at my phone when I read the things politicians say. I decided instead of just being utterly confused at the nonsense being said, I’d try to decipher it.

I figured I should ask people smarter than me if they could explain what is being said.

First off the block is this quote from the Deputy leader of the New Zealand National Party Nicola Willis.

“We are very conscious that lower-income New Zealanders are being absolutely smashed by inflation,” Willis told Radio NZ.

Well, it doesn’t take a genius to know lower-income New Zealanders are being screwed by everything right now. So it’s good that National are finally recognising that. Willis then said:

“The great shame is that Labour increased the minimum wage so much in previous years, but what you’ve seen has happened is that they have not been able to increase it as much in these inflationary years because they know it will be passed on.”

Uhhh what?

For context: The minimum wage in Aotearoa is $21.20 per hour. Around $37,360 a year.

I asked the smart people I know what they thought about this statement.

Photo by Thomas Coker

Mum Gloria lives on just over $400 a week while raising her baby. She thinks Willis’ statement roughly translates to: “We are completely out of touch with what it's actually like to be low income or to live in poverty in New Zealand”.

“I think what they’re saying is it's a real shame Labour started to work towards giving New Zealanders a living wage because it’s going to make us look really bad when we get elected and make major cuts where it’ll hurt most”.

BusinessDesk investments editor Frances Cook is the person I usually go to, to try to figure out financial stuff. She has a great podcast Cooking the Books, and two brilliant books Tales from a Financial Hot Mess and Your Money, Your Future.

I asked her - WTF IS NICOLA WILLIS TALKING ABOUT?

“It’s true that inflation is running red hot right now, and hurting ordinary people. It’s normal to see small increases, of between 1-3% per year. The reason it’s hurting so much is that right now we’ve got 7.2%, which is the steepest increase in the cost of living in 30 years,” she said.

“When people have more money to spend, that can send prices up. Shops are able to get away with charging more, people keep buying it, it’s high school economics of supply and demand.

“What’s not being mentioned here is that plenty of shops, including supermarkets, have been caught making “surplus profits”. Businesses are entitled to make money, that’s the point, but surplus profits means they’re charging far more than what’s reasonable because they can. Supermarkets are particularly tricky, because you can’t exactly stop eating.

“Cheap mortgages during the peak Covid years also made a lot of home owners feel wealthier, which led to them spending more on big ticket items such as cars and home renovations. Most of those people are not on minimum wage rates.

“There are plenty of ways to tackle inflation without hurting people who go to work every day, trying to put food on the table for their families, and yet are earning the least and often struggling the most.”

Cameron Winslang is a financial literacy expert. He has a great book on reducing debt, investing and saving called Woke Budgeting.

“Yes, everyone, namely lower income earners, are being ‘smashed by inflation’ right now. The way we all notice it is when stuff costs more to buy. The funny thing is that around the world right now our inflation is much lower than some others. But hey - why not blame it on Labour,” Winslang says.

“In reality, Labour raising minimum wage the amount they have over the years helps to support lower income earners. If they hadn’t, National right now would be saying they are heartless and should have done it years ago.”

“The real finger needs to be pointed at corporations that are driving sky high profits and paying minimum wage - which essentially means - if I could pay you less - I would. These are the massive corporations that national work for - really”.

I also asked Wellington unionist Sam Gribben what he thought Nicola was saying. Sam supports and works for The Living Wage Movement. The New Zealand Living Wage hourly rate for 2022/23 is $23.65. The Living Wage is the hourly wage a worker needs to pay for the necessities of life and participate as an active citizen in the community. The Minimum Wage is the least amount of money you can pay someone and get away with it.

“It means that National would have preferred our lowest paid workers had even harder lives over the last turbulent years. It also means that Nicola Willis hasn’t done the maths – the effect minimum wage rises have on inflation is absolutely tiny, essentially a rounding error,” he said.

“The comment doesn’t make any sense, except to be consistent with a philosophy that our most vulnerable should bear the full brunt of tough economic times.”

Community advocate Éimhín O'Shea agreed, describing the statement as “frankly untrue”.

“What Nicola Willis is saying here is that she knows that our communities don’t have enough money to afford their necessities which is of course very bad, but also that giving them more money so that they can afford their necessities is somehow also very bad. If you think it doesn’t make sense it’s because it doesn’t,” he says.

“The Government could raise the minimum wage and to claim that they can’t is misleading and an attempt to subtlety influence government policy towards her and her party’s own positions.”

“While raising the minimum wage may contribute to rising inflation, we already have rising inflation and if the choice is between reducing our most vulnerable communities suffering or not, I know what course of action I would choose.”

“A great deal of political power lies in what we see as possible and impossible and what we actually see here is an attempt to make increasing the minimum wage seem impossible when in fact the best thing we can possibly do to alleviate the suffering of those on the lowest incomes is quite simply to make sure they have enough money to live on.”