Pay hike to push up prices

Northern News - - FRONT PAGE - JENNY LING

Price in­creases, job cuts, and in­creased wages across the board - that’s what Far North busi­nesses pre­dict will hap­pen with the min­i­mum wage hike.

New Zealand’s min­i­mum wage is set to in­crease to $20 by 2021 un­der a new coali­tion deal. The in­crease will oc­cur in stages, start­ing in April 2018 when pay for work­ers on the low­est in­come will rise from $15.75 to $16.50.

Kawakawa Ham­mer Hard­ware owner Mal­colm Fran­cis says ev­ery busi­ness will have to in­crease prices to make up for the wage in­crease, though small busi­nesses will be hit harder.

‘‘You’ve got to change the GP [gross profit] to suit be­cause if you don’t you’re down the gur­gler. It’s es­pe­cially hard for the small busi­nesses be­cause wages rep­re­sent about 30 per cent of our costs. So if you go from $15.75 to $20 it’s go­ing to add an­other fair whack.

‘‘If you’ve got a big store it’s a dif­fer­ent story be­cause they’ve got a big­ger turnover. They’d sur­vive it bet­ter.’’

Kerik­eri res­i­dent Therese Wick­bom says she feels ’’con­flicted’’ about the wage in­crease.

She works with many peo­ple on min­i­mum wages through the char­ity group she founded, Bald An­gels, which helps strug­gling Far North fam­i­lies. For them, the in­crease can only be a good thing, she says.

But as a small busi­ness owner she says it could mean job cuts or price in­creases.

‘‘I’m not sure what dif­fer­ence it’s go­ing to make. If you could sim­ply in­crease the min­i­mum wage to $20 and noth­ing else changes in the world that’s won­der­ful.

‘‘But the re­al­ity is ev­ery­thing else is go­ing to change. You can’t run a busi­ness with­out mak­ing profit...and if em­ploy­ers now can’t af­ford to em­ploy peo­ple then those work­ers are out of a job.’’

Whangarei based North­land Clean­ing Sup­plies oper­a­tions man­ager Trent Beilby says the move won’t be good for small busi­nesses in New Zealand.

While only a cou­ple of his staff are on the min­i­mum wage ’’it will af­fect us in the long run’’.

‘‘It’s go­ing to flow on through every­one else. Oth­ers will ex­pect their wages to in­crease. The min­i­mum wage is $20 so peo­ple on $30 will say we should be on $40. It’s tak­ing money from small busi­ness and that’s what New Zealand is built on.’’

❚ What do you think? Email us.

Kawakawa Ham­mer Hard­ware owner Mal­colm Fran­cis says the in­creased min­i­mum wage will push up prices for cus­tomers.

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.