OPINION

“What do you reckon about the minimum wage?”

We were at the Labour Weekend Tutukaka Market: sunshine, live music, great food, great stalls and now three young blokes in board shorts and sunnies wanting to talk minimum wage.

I spent a lot of my weekends running drop-in clinics at markets around Whangārei, answering questions in the Big Red Tent.

It’s a good way to be available for people who wouldn’t call the office, but these guys picked the perfect time for their question: Labour Day commemorates the struggle for ordinary workers to gain basic rights and conditions, remembering carpenter Samuel Parnell who arrived in Wellington in 1840 and organised immigrant labourers to demand eight-hour days rather than the punishing 14-hour days normal in London.

Covid gave us a crash course in the importance of minimum-wage workers, like warehouse workers and supermarket tellers, who kept working, in public, risking infection to keep supplies flowing.

The Labour government focuses on improving standards for those workers – for a reason.

“Yes,” I told my questioners. “A decent minimum wage is vital to protect workers.” Scepticism radiated through sunnies. “And, studies from the US show states with a higher minimum wage have higher productivity, more-productive small businesses and more entrepreneurial activity.”

The first pair of sunnies perked up. “I’m a small business owner,” he said. Turns out he’s started a business challenging some of the big guns for the local market, so he got the point immediately.

There’s an obvious link between higher wages for minimum-wage earners and small business productivity: most small businesses rely on local customers, especially lower and middle-income earners who are more likely to shop locally. If those wage earners have more in their pockets, local businesses do better.

This was the thinking behind our Covid response, too: instead of cutting taxes for the wealthy and hoping it will trickle down, we supported businesses to keep paying their workers: If the grassroots flourish; everyone flourishes.

For that same reason, Labour has steadily but gradually increased the minimum wage and other basic conditions like parental leave, sick leave and Working for Families tax credits.

We have introduced legislation to end migrant exploitation and to improve conditions for our RSE workers, screen industry, and bus drivers.

This week in Parliament we will legislate another important milestone: Fair Pay Agreements, which will enable our lowest-paid, most-vulnerable workers to better negotiate fairer conditions.

In the good and the bad times, the greatest asset of any business is its workforce. A low-wage economy is a race to the bottom where nobody wins.

Minimum standards for workers prevent exploitation and protect the majority of decent business owners from competition from those few prepared to sacrifice workers’ wages and conditions for lower prices.

My visitors in the sunnies nodded, and then headed off into the beautiful Tutukaka sunshine.