Friday morning saw Workplace Relations Minister Michael Wood announcing an
increase to the minimum wage from $20 per hour to $21.20 per hour, which will
come into effect from April.
Wood said on Friday that this rise of $1.20 an hour will directly benefit about 300,000 workers. The starting-out and training minimum wage will also increase from $16 to $16.96 per hour.
While the news has delighted many, many believe that this increase will
eventually lead to inflation and an increase in grocery, food, and retail, among
others.
Indian Weekender spoke to people from different sectors to know their feelings
about the same.
Greg Harford, Chief Executive, Retail NZ
‘The new Minimum Wage rate runs the risk of stoking the inflation fire while
perversely reducing opportunities for work.'
“$1.20 is another massive increase in the Minimum Wage rate and can't come at a
worse time for retail businesses that are bruised and bleeding after two years of
lockdowns and other COVID restrictions. The retail sector faces huge cost increases
from all directions and has seen a significant drop in customer confidence in recent
weeks as the Red traffic light settings have come into play. Retail NZ has repeatedly
asked Government to postpone any further increase in the Minimum Wage, and we
are disappointed that the Government is not listening.
"Everyone in retail aspires to pay their teams well, but the sector operates on
extraordinarily tight margins. Retail NZ has been inundated with negative feedback
about the decision since this morning's announcement. A snap member poll
suggests that most businesses are not in a position to absorb the cost increase.
Moreover, 84 per cent of retailers disapprove of the announcement. Instead, 63 per
cent will be looking to increase prices, 47 per cent will be looking at reducing the
hours available for employees to work, and 38 per cent will be looking at reducing
the number of people employed. The new Minimum Wage rate runs the risk of
stoking the inflation fire while perversely reducing opportunities for work.
“A number of members are also considering closing stores, as their businesses
become increasingly unviable on the back of Minimum Wage hikes, other
compliance issues, Covid-19, and the Government’s proposals for national award
bargaining.
"It is time for the Government to push pause on increasing business costs and to
start supporting the businesses that employ most New Zealanders. More than
220,000 New Zealanders work in retail. While the Government may have good
intentions with the increase, the reality is that the decision is likely to harm the
incomes and job security of those the Government is most wanting to help."
Melissa Woolley, Assistant Secretary, Public Service Association
‘Glad that lowest-paid workers are getting some recompense, however small, for
their stellar work during the pandemic.'
“The PSA welcomes this increase of 5.9% in the minimum wage, to $21.20 an hour.
The lowest-paid workers in our country are the ones who hold our nation together.
Home support workers, healthcare workers, cleaners, supermarket workers and
security guards, to name just a few. I'm glad they are getting some compensation, however small, for their stellar work during the pandemic. For workers who don’t
belong to a union, it will probably be the only pay increase they get this year.
“It needs to be more, though. There should not be a difference between the minimum
wage and a living wage. That fact that the living wage is higher is a clear admission
that it is not possible to live a decent life on the minimum wage.”
Richard Wagstaff, President, Council of Trade Unions
‘Minimum wage rise is good news for front line workers’
“Today’s announcement is good news for front line workers. It means their wages
will keep up with rises in the cost of living. Government officials at MBIE have found
today’s decision will have a negligible impact on inflation while delivering a much-
needed boost to the wages of the front line workers who have kept New Zealand
going during the pandemic.”
Sunny Kaushal, Chairman, Dairies and Business Owners Group NZ
‘The badly timed wage increase will only see New Zealanders going backwards.'
“This untimely wage increase is another slap on the face of struggling small
businesses and Kiwis. It is going to be incredibly hard for many businesses who are
already struggling to keep their doors open without targeted support, especially
those affected by the ongoing lockdowns – that’s the reality of the mess that this
Government has created.
“It appears the Labour Government just doesn’t back Kiwi businesses, and it has
done nothing much to prevent the rapidly rising cost of living in New Zealand, and Kiwis are poorer for it. It is not rocket science; the badly timed wage increase will
only see New Zealanders going backwards, more and more workers layoffs because
of businesses going under. It will affect every industry and supply chain, the cost of
which will ultimately be passed on the consumers who are already hit with record-
high inflation, rising interest rates, increasing cost of rent and cost of basic
necessities are now growing faster than they have at any time in the past decade,
and this hurts those living on the breadline the hardest.
“We are in the middle of a global pandemic, what was required a sensible decision
and urgency to drive economic recovery, putting control on big government spending
and put a hold on wasted spending on low priority projects like the light rail and
cycleway etc., instead introduce a stimulus package that supports the enterprise and
businesses to create more employment and get those tens of thousands of people
on work rather than putting pressure on the treasure to pay them benefits.”
Rana Judge, Manager, Otara Business Association
‘Business owners will have to figure out how to pass on and reduce those labour
costs by raising prices or reducing employment.'
“Wages are an important “price” in an economy, impacting decisions about the use
of labour in producing goods and services. Increasing the minimum wage
may increase inflation or the costs of specific goods or services that will impact the
individual in real terms.
“The market law in every economy that governments can't change is the higher the price of something, the lower the quantity that will be purchased. This applies to
labour as well. To stay in business, owners will have to figure out how to pass on
and reduce those labour costs by raising prices or reducing employment.”
ISSUE
Leave a Comment