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  • rmacculloch

Nothing PM Chris Hipkins says on economics makes sense to me - it's just virtue signaling nonsense

The government has announced an increase in benefits to help it buy the election. It has also increased the minimum wage by $1.50 per hour. This change doesn't cost the government one dollar - the cost is borne entirely by business.

On that note, whenever PM Hipkins talks economics, I can never follow his logic - here's an example from his press conference yesterday:

Hipkins on Friday said he acknowledged that for small businesses, the minimum wage can "put an extra cost on them and extra pressure on them" .. "But in my conversations with small business owners, they also want to make sure that they're doing the right thing by their staff as well. They also want their staff to benefit from their hard work too". An increase in the minimum wage is, therefore "the right thing to do."

It's yet another example of economic garbage coming from the PM. Why? Since if small business owners wanted to do the "right thing" by their staff, there was nothing to stop them from increasing wages before the rise in the minimum wage. The person most famous for increasing wages higher than the going rate was Henry Ford - The Ford Motor Company began to pay its workers $5 per day in 1914 when the average wage at that time was between $2 and $3 per day. The reason was that he wanted to attract higher quality workers. However Hipkin's minimum wage hike is, of course, a totally different kettle of fish - it is a forced increase in wages.

Worse still, the PM has made a statement that the likes of Harvard Professor Ed Glaeser seriously object to. He is straight-up virtue signaling by saying a rise in minimum wages is the "right thing" to do but forcing the cost of that "right thing" onto someone else. Glaeser argues that if society as a whole decides that it is "right" to reduce inequality by helping those on low income, then it should be done by raising general taxes and redistributing wealth. Of course, there are fewer votes in that deal for the PM.

So Hipkins is simply targeting a group - business owners - who are unlikely to vote Labour - and forcing the cost of what he claims is a morally superior policy - onto them. To tell the falsehood that those businesses always wanted to pay their workers more takes the cake.



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