Wednesday, April 12, 2006

I wonder how much easier the decision was made by the minimum wage rise?

Recently I blogged about the "silver lining in the minimum wage cloud" - that it may finally encourage New Zealand to invest in automation and some real productivity.  It appears that we might have the first large companies heeding this movement: Stuff Union disappointed at Fonterra decision.

"A total of 400 jobs would go but 100 staff would be rehired.The work will be transferred to one remaining Eltham plant where automation was being introduced."

The only question in my mind remains whether this would be such an easy decision, or whether the Unions counter proposals would have had more merit if not for the meddling in the labour market? I presume a lot of people will see this as a negative - I'm sorry but I cannot see this as being other than positive for New Zealand - especially when you compound:
While 400 jobs were affected at the existing factories, the new equipment would require new skills so the company expected to employ more than 100 people at the new facility."
For New Zealand's future I'll take 100 skilled jobs over 400 unskilled any day.  How else are we to move to a high wage economy?
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burt said...

I don't need to elaborate – but think of the bell curve IIQ. The connection between increasing the labour costs and job loses is missed by the Unions. They still live in a world where 'Non Govt' = Bad. You know the mentality, it's better to see a company close down than to see it shed 1% of it's workforce to stay in business.

iiq374 said...

To be fair I've normally seen the Unions stance as it being more important for the "remaining" workers to be paid exorbitant amounts, rather than have more workers.

That way the members are happier - the ones that are sacked rarely remain members...