by Daphna Whitmore
One of the first announcements of the new Labour-led government was that the minimum wage will rise from $15.75 to $16.50 an hour in April 2018. It will then increase each year, reaching $20 an hour by 2021. While this news got some over-excited responses (from the left and the right) most people understand this is not a seismic shift.
The minimum wage has risen every year for over a decade, mostly pushed by union and community campaigns for a living wage. Despite talk of the new coalition being a ‘change government’, the Labour-led team will have boosted the lowest-paid workers a mere 25 cents an hour more than the National government likely would have. The living wage remains, as ever, postponed.
There are some other measures such as Labour’s Best Start package which will add around $60 a week to families with young children. There will also be an increase to the accommodation supplement, and free health care will be extended to children an extra year from 13 to 14 year olds. Again, a very modest increase on the programme of the previous government.
Labour and their coalition partners have promised to be ‘fiscally responsible’ and the business community is already saying they are happy to work with the new government. That the Labour-led government is not unlike National is not surprising. The two main parties have a long history of running the capitalist state seamlessly. For instance, National kept in place the previous Labour government’s Working for Families tax subsidy for low-income workers. In practical terms this subsidises employers who pay low wages, so National decided to increase it.
Poverty levels have hovered at between 20 to 30 percent of the population over the past two decades. With skyrocketing house prices in Auckland the poverty issue became a hot election topic. Jacinda Ardern has vowed to reduce child poverty, even becoming the newly-minted Minister for Child Poverty Reduction. So far there has been no mention of raising benefits – where the deepest levels of poverty are – suggesting Ardern’s ministry is unlikely to do more than tinker.
The name of the ministry and the term ‘child poverty’ gives a clue to the approach. Don Franks in an article here argues the ‘child’ poverty approach “covers over the fact that thousands of workers don’t get paid enough with the notion that kids suffer because their parents are too shiftless or selfish to provide for their families.” He notes “the other advantage of reducing poverty to Child Poverty is that the setting is not about creating social equity but entirely about helping children – the most vulnerable.”
Social equity is not just about reduction in poverty, it is a fundamental shift from an unequal society and it needs to reach beyond national borders.
If by 2021 the minimum wage is $20 an hour, it is unlikely to be a living wage with costs rising in the interim. A living wage is defined as the income necessary to provide workers and their families the basic necessities. Many of our basic needs are provided by goods produced in other countries, particularly in the low-wage third world. Commodities produced in low-wage countries are consumed mostly in imperialist countries, of which New Zealand is a member.
Should a living wage in New Zealand be a separate issue from the need for workers globally to have a living wage?
Linking a living wage in New Zealand to a global living wage campaign would be a real step towards working class unity. In fact, to limit the fight for decent conditions to one country makes no sense in a globalised world. When the clothes we wear are made by Bangladeshi garment workers being paid 30 cents an hour is the grinding poverty in that country an issue we can ignore? When the computers and phones we use are made by Chinese workers earning $2 an hour in high-tech sweatshops can we deny this is super-exploitation?
A globalised living wage campaign in a world of globalised production makes real sense. We will be discussing this in future articles, and we’d like to hear your thoughts on the idea of a global living wage.