$2 hour boost a win-win for all: Goff

Phil Goff. Photo / Getty Images

Labour leader Phil Goff says boosting the minimum wage by $2 an hour will see people going from struggling to make ends meet to spending enough money to stimulate job growth.

Mr Goff made the claim yesterday when he was challenged on a Department of Labour report that found boosting the minimum wage from $13 to $15 an hour would cut between 4100 and 5890 jobs from the job market. Between 370 and 1980 of those jobs would be for 16- and 17-year-olds.

Mr Goff said he did not disagree with the report, but boosting the minimum wage would create more jobs than would be lost.

"What I'm saying is, there will be a net benefit. People will have more money to spend buying the necessities. That keeps New Zealanders in work, in business. That keeps the economy going."

Boosting the minimum wage is one of the ways in which Prime Minister John Key has tried to paint Labour as anti-business.

Mr Key has repeatedly said that a minimum wage of $15 an hour would see people lose their jobs.

The department's report estimated that a minimum wage of $15 an hour would push up unemployment from an estimated 5.5 per cent next March to 5.7 per cent. The report also noted UK research that found that the minimum wages had no effect on employment, or the effects were either very small or difficult to detect.

Mr Goff said it was not a benefit for business owners to pay lower wages if that meant workers had no disposable income.

"When you boost the minimum wage for people who have very little to spend, you create demand for goods and services. It will certainly help in job growth.

"It will give people a living wage. They'll be able to buy the necessities. That'll be great for them, but it will be good for business selling those necessities to them."

He said the current minimum wage was not enough to live on.

National's campaign manager Steven Joyce yesterday listed 10 items on Labour's wishlist that he claimed would stifle businesses. Among them were the proposed hike in employer contributions to KiwiSaver, industry-wide standard agreements, and a tax on commercial irrigation.

"The Labour Party either doesn't understand the direct relationship between higher costs and a less competitive economy, or it wants to pretend the relationship doesn't exist," Mr Joyce said.

"Labour are running a 'head in the sand' approach to jobs."