Matthew Jones: Minimum wage rises destroy jobs for those most in need

Photo / Thinkstock
Photo / Thinkstock





This is good isn't it? High incomes and more economic demand as Julie Fairey "argues". Well no, what happened was a mass exodus of jobs, one fishing and canning company slashing thousands of jobs on the island nation, sending them to the US state of Georgia.



Representative Dan Lankilde of American Samoa told a Reuters journalist in 2009, "Over the past 50 years the industry provided massive job opportunities for unskilled labour.

"The 2007 law that increased the minimum wage was the beginning of the end for the tuna industry and the cause of massive job losses for our already fragile economy.

"The only way to resolve the trend towards total economic disaster is for Congress at its soonest opportunity to reverse its position."






These are the less skilled workers that since the adoption and increases of minimum wage laws have had job and internship opportunities dry up relative to what we could have had. The opportunity to become more skilled and move up the ladder to command higher wages dries up with it.

Wages are a function of productivity; therefore the focus to increase wages must be through learning new skills and improving educational achievement, particularly for those in the poor areas who cannot afford to escape the government monopolised education system.

I understand that most of those wanting a higher minimum wage do so with good intentions but the consequences to the poor, cutting off their means of making a decent living and giving them a way out of the vicious cycle of poverty will do more harm to the social fabric than we can imagine.

Matthew Jones is a student of commerce and property at the University of Auckland.
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- NZ Herald

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