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this post was submitted on 29 Nov 2023
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I would argue that Labour's plan, while well intended, worked better as a vote gatherer than supporting the middle/lower classes. It effectively increased the cost of a working hour, without touching the value that work hour provided - artificially increasing wages without increasing the value that wage provided.
This is the exact myth we're told under neoliberalism that the comment you're replying to sets out - increases in productivity or value are already not leading to increased wages for workers. Working a little bit more/harder to generate more value doesn't reflect higher wages in this system.
Plus our lower productivity compared to many developed nations is because of low wages. Increasing wages means employers have more incentive to invest in those people, including training, better tools, and process automation requiring fewer, higher skilled staff.
Basically, you can fake it till you make it. Increasing wages leads to higher productivity long term. Low wages make employees replacable and there's no incentive to invest in them.
This is so evident in NZ businesses, I have seen this so often it is sad.
Highly skilled and productive people feel like they have to leave to get a pay rise.
I feel like this one is an egg or chicken arguement - you could also argue that because each individual provides such a small amount of economic value compared to other countries (reference back in 2010 was ~80k per capita vs 300k-3mil overseas) we can't provide the wages, or tax revenue to grow.
You could try to argue that, but one option (high wages) lead to higher productivity because it incentivises investment in staff and tools.
Keeping wages low does nothing to incentivise investment in higher productivity, so productivity stays low.
One option is better for companies (keep existing profits), the other is better for the country (lower short term profits until productivity rises).