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.’’