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Fri 1st August 2014

Minimum Wage and Child Support

Filed under: General — Downunder @ 3:11 pm

Minimum wage is a political toy in the sense that it can be abused at election time with promises that have notable flow-on effects and manipulated between elections; it is a cabinet decision as to what the minimum wage is set at.

When you look at our position in world statistics we are amongst the best at maintaining our minimum wage levels – our economic issues are not wages, but our spending power.

So what happens when we hike the minimum wage $2 an hour and at the same time scrap youth rates. I’m not an economist but it seems clear from what economists are saying that the economic bubble will cause a combination of retraction in business and slow hiring rates.

I don’t disagree with that; it seems a fairly obvious outcome.

So, when it comes to our decreasing rate of employment, it is not the unemployed total percentage that is as important to watch as the yet to be employed percentage increase.

Our youth rate of unemployment will rise.

If you are paying child support, then you will be paying it for longer, until your child is old enough to receive the unemployment benefit at 18 years of age (unless they are still at school).

But the group of men who are most affected are those amongst the child support payers who have their benefit reduced by a child support deduction.

The unemployment benefit increases under a different formula – increases being determined by the CPI – are applied at a later date.

When you throw a $2.00 an hour increase in the minimum wage at the economy, you are giving about 80 – 90 thousand people a $2.00 an hour advance on the inflationary impact of what you are doing (along with a lessor amount for those above the minimum wage up until the $2.00 increase ceases to have an impact), but while that inflationary impact is going through its evolution it is reducing the spending power of the unemployed.

The unemployed will not see an increase in their benefit until the rate of inflation, determined by the CPI is applied during the following year.

So, as the inflationary effect of what is happening takes place, it means that a father living on a child-support reduced benefit is seeing his spending power, his ability to pay his bills, his ability to maintain his dignity, quickly eroded.

The same government that is handing out the $2.00 per hour minimum wage increase, is making sure it gets its benefit recovery back immediately, but making an unemployed father go through a two year lag in reduced spending power on a ‘wage’ that can equate to as little as the equivalent of $4.00 per hour when the maximum reduction is enforced.

Now, that same 4.00 per hour isn’t going to rise to $6.00 an hour!

Put in this position is there the slightest possibility that it could tip some men over the edge and drive them to suicide?

Are men in a modern society still that expendable?

Are fathers that unimportant?

Is there any protection for the most vulnerable people in society when they just happen to be male?

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