ZB

Mike's Minute: Low wages won't solve our labour crisis

Author
Newstalk ZB,
Publish Date
Fri, 8 Jul 2022, 9:52am

Mike's Minute: Low wages won't solve our labour crisis

Author
Newstalk ZB,
Publish Date
Fri, 8 Jul 2022, 9:52am

Beware the wisdom of the academic.

AUT's David Williamson is weighing into the labour shortage debate with the insight only an academic can give; if you can't pay decent wages, don’t be in business.

It dovetails into the Government's view which is broadly the same.

But that has been slammed by most because of the arrogance of commentary and law based on no experience whatsoever.

If you have “been there done that” you come with at least an element of credibility. If you are a theorist, you tend to be treated the way you deserve.

It's also true that Reserve Banks like a bit of a recession because it gives the economy a reset and it flushes out the businesses that weren't really businesses but shuffled a bunch of stuff around to stave off closure.

GST is currently an issue for the IRD. More and more businesses are taking from the GST at the moment, not paying it, to pay other bills they see as more pressing.

It's also against a backdrop of indisputably difficult times, much of which have been delivered by an incompetent government who have virtually no real-world economic understanding.

Part of that is the labour crisis. It's a problem no one disagrees about, until it comes to actually addressing it and the Government's answer is typical of unionists and political lifers. It's all paperwork, fees, rules, procrastination, and lack of delivery.

But for all the fault and all the problems, there is a kernel of truth in there. Some people do pay crap wages and have only got away with it because the economy allowed them.

For what it's worth, we employ a couple of people to do stuff for us. We pay the equivalent of 45 to 50 dollars an hour. Could we pay less? Yes.

Why don’t we?

Because we like the people, we like what they do, they are good at what they do, we respect them, and as a result they don’t leave, and they have been with us for years.

Meantime four of our kids have been in the minimum wage world in the past couple of years. We have seen how it works, because it doesn’t work. Sometimes you get lucky with a good employer and sometimes you don’t.

It’s a transient experience, there is little if any investment, and no great expectation.

You don’t build great businesses on high turnover. And high turnover often comes from a lack of buy in. And lack of buy in comes from low wages.  

Different sectors have different price points. Our current market scenario is a mess, it’s a crisis, and it needs urgent addressing.

But equally, the answer is not, nor has it ever really been, at the bottom end of the market.