Will business costs raise too high with minimum wage?

Leah Panapa 19/12/2019

The Minimum wage was confirmed to be raised by $1.20 on Wednesday meaning an expected $48 extra per week for full time minimum wage workers.

Leader of the ACT party David Seymour Joins Magic Talk Mornings with guest host Leah Panapa to oppose the measure.

Seymour tells Magic Talk that economists must ask “what happens next” suggesting that a raise in the minimum wage will lead to fewer jobs created, loss of jobs and passing the costs to consumers.

"The next thing that happens is the cost structure for businesses goes up."

It means people miss out on jobs, it means costs for businesses go up.

He says, “It means consumers actually shift away from the businesses that are supposed to be employing the people we’re trying to help.”

Seymour tells Leah that the issues with raising the minimum wage had already occured with the previous two raises in minimum wage.

When Leah questions David that the difficulties he argues are limited to small businesses he claims it is a “combination of both.”

He makes an example of large companies choosing to install technological solutions rather than pay higher wages, while small businesses will choose not to employ as many people.

You can listen to the interview above.