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The minister of labor relations does not rule out raising the minimum wage in line with the living wage.
By Yvette McCullough of rnz.co.nz
A new report from the Helen Clark Foundation and the New Zealand Institute for Economic Research calls for the increase, saying it would boost productivity and create a more inclusive economy.
The opposition says the report is wrong and that racking up more costs at companies will lead to job losses.
NZIER Deputy Executive Director Todd Krieble said that in the wake of Covid-19, the government should seize the opportunity to hit the reset button.
“We’re not going to be able to depend on migration, at least not for a while, and we have incredibly cheap loans right now, it’s really the first time in our history that we have that kind of alignment. It’s an opportunity to invest in our people and be more inclusive with growth, “he said.
Krieble said raising the minimum wage to the living wage level of $ 22.10 would boost productivity.
“It would encourage employers to invest in skills, be it technical skills or soft skills, and help employees stay.”
The government increased the minimum wage three times the last term, going from $ 15.75 to $ 18.90.
During the election, Labor promised to raise it to $ 20 next year.
Labor Relations Minister Michael Wood said that after that, he would take stock and decide what to do next.
He did not rule out equalizing the living wage.
“Well-paid workers live a better life, they are better able to meet their basic needs and there are very strong arguments to say that this is better in terms of maintaining the workplace, building a skilled and productive workforce, those are compelling arguments “, said.
“But then we get to the critical point of where we draw the line in terms of where wages should be located. So I’m not closing that option, I’m saying I want to see the full range of factors before making decisions.”
National Party small business spokesman Todd McClay said the report was wrong and would lead to higher costs for consumers and more job losses.
“What the business community needs right now are policies that help them grow the economy and create jobs, not higher costs that will slow down the job market, and sadly I think the suggestion from [Helen Clark] Foundation will have the opposite effect to what they expect, “he said.
Business New Zealand CEO Kirk Hope said the advice from the Ministry of Business, Innovation and Employment to the government was that a living wage would reduce the number of available jobs by 30,000.
Hope said young people would be the most affected.
“The demographic of people who lose their jobs are disproportionately young, ages 18-24, because they are often the least qualified.”
However, Krieble said he was nearsighted, and Covid-19 had already caused 11,000 vulnerable jobs to disappear.
“The jobs that were going to be lost are gone and I would support the employers, I think we should support each other as a country to make the right kind of investments that would raise productivity,” he said.
“Dynamism has already been introduced to the economy, so let’s get it going in the right direction.”
Wood wasn’t convinced either.
“The evidence that we have seen in New Zealand is that the governments led by the Labor Party, which have sustained increases in the minimum wage, are also governments that have seen sustained declines in unemployment, so don’t always believe the argument that a The decent minimum wage for workers has to be at the expense of jobs, “he said.
McClay said the minister shouldn’t even consider piling up more costs at companies at a time when they are already struggling.
“What you should be doing is looking at ways to create more jobs and work with the business community. You need to send a signal to the business community that you support them,” McClay said.
Wood said that was exactly what he was doing, and that he did not believe that good companies should be afraid that workers would receive a fair wage.
He promised to work through the process collaboratively, consulting with workers and companies before making any decisions.
Reactions found among business owners
Some business owners say that raising wages to a living wage will only result in layoffs.
Some said they would be happy to pay more for experienced staff, but having to pay a higher salary for someone fresh out of high school without any work experience was not sustainable.
Complete First-Aid Supplies owner Shelley Meredith said her business had struggled to recover after the Covid-19 shutdown. Now he was moving his office to work from home and stockpiling his supplies and stock.
“Yes [they] put the minimum wage, we may have to think about eliminating one of our employees, “he said.
“I even have to leave this building and move it home and if they look to raise the minimum wage, you have an 18 or 19 year old who just got out of school [with] without skills, without experience, we simply cannot use them. “
He said his business had worsened since the closing.
Quick Stop Tires and Mechanical owner Sarkaw Abdullazada said he has already paid his staff above the minimum wage, but raising it further would put additional pressure on his business.
He said that if the government wanted to raise the salary to a living wage, then it should provide some kind of subsidy to the business.
Without any help, you would potentially have to cut down on some of the work to maintain your store if the suggestion were implemented.
Lynfield Chainsaws & Mowers manager Glen Lurman said he supported a pay increase because that would help young people start their own lives, without having to depend on their parents.
