Minimum Wage and Jobs

The CTU has released a research summary showing the relationship between increases in the minimum wage and jobs.

Bill Rosenberg said "a major study by Dean Hyslop and Steve Stillman looking at the effect of increases of between 41 percent and 69 percent in the youth minimum wage in New Zealand was done in 2007. It found 'no robust evidence of adverse effects on youth employment or hours worked' and in fact, showed there was an increase in hours worked for 16 and 17 year old workers."

"Before those increases came into effect Business NZ warned that for every 10 percent increase in the minimum wage, there could be up to 4 percent fall in employment. But this was shown to be completely wrong."

Bill Rosenberg said "employment growth appears to be much more strongly related to overall economic conditions than to a particular issue such as the minimum wage. This is what the evidence shows and it would help this debate if the Government and business lobbyists acknowledged that."

"Similarly' said Rosenberg, "when this Government first introduced the law allowing small businesses to sack workers with no right of appeal in the first 90 days of employment, the Minister of Labour said (11th December 2008) 'the 90-day trial will provide real opportunities for people at the margins of the labour market' and she said that included young people and the long term unemployed."

"In fact youth unemployment has gone up since then from 17.9 percent to 27.4 percent and the number of long term unemployed has gone up from 19,200 to 40,200 people."

The CTU has released this research summary to inform the public debate and also demonstrate that the CTU has carefully researched the issues in relation to the level of the minimum wage and employment.

"We are satisfied that an increase to $15 an hour is entirely justified and reasonable," said Rosenberg.

• Click here to download the Research Summary pdf

ENDS.

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