Kerre Woodham: Minimum wage increase - sensible or cynical?

Sensible or cynical?

Yesterday, the Prime Minister announced the first of the Government's policies it will be scrapping in a bid to win back the support of those who have become disillusioned by Labour's lack of action and incoherent messaging.

The TVNZ/RNZ merger has been scrapped for now. The hate speech reforms have gone back to the Law Commission. The Workplace Insurance scheme has gone, and in music to the ears of the unions and the lowly paid, the minimum wage has gone up again.

Now that will delight those who are struggling. Really though, who isn't struggling with the rising cost of everything? But that money to pay the workers has to come from somewhere.

Have businesses become that much more productive that wages can rise? Some may have, but as the Employers and Manufacturers Association says, an increase of $1.50 an hour to $22.70 is much more than was expected, and for the majority of businesses, it's problematic. Inevitably, in many cases it will be passed on to consumers through increased prices. 

But is simply raising the minimum wage the way to create a productive first world country where everyone doesn't just survive, but thrives? I don't know.

Like so much this Government has done, it looks way too simplistic to me. Can your business sustain this increase? And has Labour made these changes to the policies and raised the minimum wage because these are sensible decisions and the right thing to do? 

Or is this a cynical ploy from an under pressure party who wants to ensure that they don't have to go looking for a real job a few months from now? 

See omnystudio.com/listener for privacy information.