Wednesday, 27 February 2019 13:27

Magical thinking

Written by Rural News Group

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While we're on the topic of a higher minimum wage, Horticulture NZ chief Mike Chapman is a clear thinker on this, cutting through the bulldust coming out of Wellington.

Obviously, the horticulture industry, like dairying, is hard-hit by labour shortages, so if Chapman believed a higher minimum wage would help address the shortage he’d be in favour.

However, Chapman says the Government line that lifting the base wage is going to create a high wage economy is faulty thinking.

“It’s pure economic fallacy that driving up wages will magically transform NZ; that it will get rid of low paid and what they see as ‘unskilled jobs’, so creating a highly paid work force that does not have to do what [the Government] considers to be unskilled work”.

The theory goes that higher wages leads to increased labour productivity therefore the employer recoups the higher wage cost.

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