Mixed re­ac­tion to wage in­crease


An in­crease in the min­i­mum wage will have some pos­i­tive ef­fects for the Gore district, but that will be tem­pered with an in­crease in wages and salary bills which could lead to price rises, in­dus­try lead­ers say.

The new coali­tion gov­ern­ment will in­crease the min­i­mum wage on April 1 2018 to $16.50 from $15.75, an in­crease of 4.76 per cent.

It will in­crease the rate to $20 an hour by 2021.

East­ern South­land Cham­ber of Com­merce board mem­ber Ju­lian Mor­ris said the in­crease would make the en­vi­ron­ment ‘‘chal­leng­ing’’ for small busi­ness own­ers in the district.

‘‘Re­gard­less of what the politi­cians say it’s go­ing to have a lot of im­pact on small busi­nesses.’’

He said small busi­nesses could raise their prices be­cause their over­heads would go up and they would need to cover costs.

‘‘There will be fewer job op­por­tu­ni­ties and higher costs of goods and ser­vices be­cause some­one has to pay for it.’’

There were some ben­e­fits, as those on low in­comes could have more dis­pos­able in­comes, but they could end up pay­ing more for goods and ser­vices, he said.

‘‘It’s a bit of a re­volv­ing cir­cle in that sense.

‘‘Ob­vi­ously it’s a good thing for those that are on low wages - there are al­ways good sides to the story.’’

GoRe­tail spokesman Ivan van der Wa­ter said re­tail­ing was an evolv­ing busi­ness and re­tail­ers had to ‘‘take what they got’’ when the Gov­ern­ment changed or there was a change in pol­icy such as the min­i­mum wage ris­ing.

‘‘There could well be pros and cons to it, but if we want to take the pos­i­tives from it then peo­ple will have more money to spend and that is a pos­i­tive for re­tail­ers.’’

Mataura Li­cens­ing Trust gen­eral man­ager Mark Paterson said the trust has about 140 wage earn­ers on an hourly rate, and em­ploys 15 peo­ple on the min­i­mum wage, all of whom are aged un­der 18.

‘‘For the last 23 years that I am aware of the trust has on April 1 each year in­creased the wage rate by be­tween 2.5 and 3 per cent across the board.

‘‘Our av­er­age wage rate at the time of writ­ing is $18.67.

‘‘In terms of our abil­ity to pay we would nor­mally have an in­crease of $40,000 p.a., this will dou­ble to $80,000 p.a. for the wage earn­ers but bear in mind that we have to in­crease the 40 salaried em­ploy­ees as well so although not hugely sig­nif­i­cant in the scheme of things it will add to our an­nual wage and salary bill which is in the re­gion of $5m p.a.

‘‘Ob­vi­ously as a con­se­quence of the in­crease there is a slight in­fla­tion­ary ef­fect which will either have to be ab­sorbed or passed on to the con­sumer as is nor­mal busi­ness prac­tice.’’

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