Thank you for so clearly pointing out the out-of-touch nastiness of the people who want to run the country. We really need to avoid that happening. Keep it going - there's bound to be a lot more of the same (or worse) stuff to be addressed!
That whole whinge about minimum wage increases being bad for business is a pisstake. Ripping your staff off for their hard mahi is a pisstake and arguably a lot worse for your business overall.
The problem is that Nicola Willis either (1) didn't bother to check the rhetoric against the reality - 7% of wage earners are on the minimum wage and even quite a large percentage increase is -just- not going to have a discernible macroeconomic effect. A tiny cut in the top tax rate or changes in tax administration or - though she'd never mention it - the index-based increases in superannuation has a far greater impact or (2) (and worse) she knows it's false but, hey, let's claim that Labour has somehow done over the lowest income-earners in an economically imprudent way!
I really like the new series, an excellent article. No matter how tough things get Supermarkets never seem to drop their profits, such is the beauty of the duopoly and no low cost alternative as many other countries have.
Shameless plug I've also been asking What the fuck are you TALKING about? But with journalists rather than politicians:
Jan 26, 2023·edited Jan 26, 2023Liked by Emily Writes
Love it, and love the title of the new series.
In an interview this afternoon on RNZ's Checkpoint, economist Shamubeel Eaqub made the point that increases in the minimum wage tend to not increase take-home pay for low-income workers because other benefits that they are likely to be getting (eg Working for Families) are decreased when their pay goes up. He argues that making changes to abatement rates (i.e. how much the Working for Families payment or income support benefit is reduced for each extra dollar a person earns) would have more impact on take-home pay for low-income workers than increases in the minimum wage. Of course, the govt could always do both...
It always makes me laugh when right wing politicians etc argue that wage increases/benefit increases for low-income workers should be avoided because of inflationary effects, but that the best way to stimulate an economy is to cut taxes for the rich (with the so-called and non-existent trickle-down effect stimulating the whole economy). The argument is that inflationary effects of wage increases for low income people come from the fact that they will spend every cent of those wage/benefit increases (because they need to), thereby fuelling inflation. In contrast, people on v high incomes won't spend every cent of any wage or any other $$ increase because they already have all their basic needs (and more) met, so are likely to save their extra $$. So by the same logic, if you want to stimulate an economy, you should cut taxes at the lower and middle end, not the high end... and yet over and over again, it is the higher tax rates that are cut...
I interpreted their crappy statement as saying “an increase in our country’s lowest paid employees wages is not something that businesses will want to cover by decreasing profits even a tiny bit so in turn they’ll increase the price of their goods and services and pass any change in production costs onto the consumers”
AKA whatever changes those with the money and status will do the best for it to not affect them.
I rolled my eyes so hard into the back of my skull at the Nats’ statement I almost couldn’t find them again. Thanks for making me feel less alone in total bewilderment!
The minimum wage in Aotearoa is $21.20 per hour. Around $37,360 a year.
Thank you so much for doing this mahi Emily. This is the most useful Substack I have ever read. And I love my other Substack writers!!!!
What I need is childlike simple hard hitting facts so I can have a useful conversation that leaves me feeling I made a sensible logic-based comment.
When talking to people criticising the labour government I find it hard to base my comments on facts. Like do you know the minimum wage is $37360 a year. And that’s if you work a 40 hour week.
Please please do more fact finding like this for those of us floundering in the morass of reckons and opinion-based criticisms of the whanau who wouldn’t miss a minute of Mike Hosking.
I’ve updated the piece with some just past deadline comments from the great Cameron Winslang who is an expert in financial literacy.
Now this is good journalism. Another post worth the whole subscription alone.
Two thumbs up for this format for this series 👍 👍
Thank you for so clearly pointing out the out-of-touch nastiness of the people who want to run the country. We really need to avoid that happening. Keep it going - there's bound to be a lot more of the same (or worse) stuff to be addressed!
That whole whinge about minimum wage increases being bad for business is a pisstake. Ripping your staff off for their hard mahi is a pisstake and arguably a lot worse for your business overall.
Fabulous explainer Emily thank you! Can we send this one to Nicola for a read over please
The problem is that Nicola Willis either (1) didn't bother to check the rhetoric against the reality - 7% of wage earners are on the minimum wage and even quite a large percentage increase is -just- not going to have a discernible macroeconomic effect. A tiny cut in the top tax rate or changes in tax administration or - though she'd never mention it - the index-based increases in superannuation has a far greater impact or (2) (and worse) she knows it's false but, hey, let's claim that Labour has somehow done over the lowest income-earners in an economically imprudent way!
I'm confident that Nicola knows.
I really like the new series, an excellent article. No matter how tough things get Supermarkets never seem to drop their profits, such is the beauty of the duopoly and no low cost alternative as many other countries have.
Shameless plug I've also been asking What the fuck are you TALKING about? But with journalists rather than politicians:
https://nickrockel.substack.com/p/jenna-lynch-declares-hipkins-honeymoon
Love it, and love the title of the new series.
In an interview this afternoon on RNZ's Checkpoint, economist Shamubeel Eaqub made the point that increases in the minimum wage tend to not increase take-home pay for low-income workers because other benefits that they are likely to be getting (eg Working for Families) are decreased when their pay goes up. He argues that making changes to abatement rates (i.e. how much the Working for Families payment or income support benefit is reduced for each extra dollar a person earns) would have more impact on take-home pay for low-income workers than increases in the minimum wage. Of course, the govt could always do both...
[See his comments at the end of https://www.rnz.co.nz/news/business/483170/immigration-not-a-solution-to-fill-skills-gaps-economist]
It always makes me laugh when right wing politicians etc argue that wage increases/benefit increases for low-income workers should be avoided because of inflationary effects, but that the best way to stimulate an economy is to cut taxes for the rich (with the so-called and non-existent trickle-down effect stimulating the whole economy). The argument is that inflationary effects of wage increases for low income people come from the fact that they will spend every cent of those wage/benefit increases (because they need to), thereby fuelling inflation. In contrast, people on v high incomes won't spend every cent of any wage or any other $$ increase because they already have all their basic needs (and more) met, so are likely to save their extra $$. So by the same logic, if you want to stimulate an economy, you should cut taxes at the lower and middle end, not the high end... and yet over and over again, it is the higher tax rates that are cut...
Love, love, love!!
I'm sure half the time they just open their mouths & hope for the best...
So good!
I interpreted their crappy statement as saying “an increase in our country’s lowest paid employees wages is not something that businesses will want to cover by decreasing profits even a tiny bit so in turn they’ll increase the price of their goods and services and pass any change in production costs onto the consumers”
AKA whatever changes those with the money and status will do the best for it to not affect them.
I rolled my eyes so hard into the back of my skull at the Nats’ statement I almost couldn’t find them again. Thanks for making me feel less alone in total bewilderment!
Excellent series! Thank you so much for this, I was baffled by her bullshittery.
Thanks Emily Writes! I was also very confused by NW’s statements…Love this explainer series!!
Love the title of this new series 💛
The minimum wage in Aotearoa is $21.20 per hour. Around $37,360 a year.
Thank you so much for doing this mahi Emily. This is the most useful Substack I have ever read. And I love my other Substack writers!!!!
What I need is childlike simple hard hitting facts so I can have a useful conversation that leaves me feeling I made a sensible logic-based comment.
When talking to people criticising the labour government I find it hard to base my comments on facts. Like do you know the minimum wage is $37360 a year. And that’s if you work a 40 hour week.
Please please do more fact finding like this for those of us floundering in the morass of reckons and opinion-based criticisms of the whanau who wouldn’t miss a minute of Mike Hosking.
Barb
67
Taupō
Thanks Barb ❤️
A very good piece, many thanks