High Minimum Wage Supersizes Unemployment

Reports today on wage negotiations between McDonald’s and the Unite Union show yet again that legislating to increase the minimum wage leads to fewer jobs being created, ACT New Zealand Employment Spokesman Hon Heather Roy said today.

McDonald’s Director of Development Brett Watson said yesterday that Labour’s proposal to raise the minimum wage to $15 an hour would threaten the viability of McDonald’s future development programme and the 4,000 new jobs it would create.

“Mr Watson’s comments confirm what ACT has said all along: forcing wages up by increasing the minimum wage hurts our economy, and low income workers, by stifling job creation,” Mrs Roy said.

“McDonald’s provides excellent on the job training, offering their predominantly young and low skilled workforce the opportunity to work their way through the ranks towards a National Diploma in Hospitality Business Management (Level 5). The skills they learn on the job give them a step up on the career ladder and increase their earning potential in the future.

“Not only will a $15 minimum wage stop McDonald’s from creating 4,000 new jobs by 2012, it will, no doubt, impact on the ability of McDonald’s to offer valuable employee benefits and training. Labour’s continued support for this policy merely highlights their incompetence when it comes to basic economics.

“If one of the world’s most successful companies can’t afford to pay their staff $15 an hour, how on earth can we expect small businesses to?” Mrs Roy said.