‘BARELY GETTING BY’
Raising the minimum wage makes businesses nervous and workers ecstatic. Susan Edmunds reports.
BELLA Walters has worked in minimum-wage jobs for almost 30 years.
The mother of two adult sons says it’s a constant struggle to ensure that what money she gets each week covers what needs to go out. ‘‘On what I’m getting, I can barely pay rent.’’
She is lucky to get $900 a fortnight in her pay packet and her rent is $920, so her family tops her up. There’s bills on top of that.
She lives on the North Shore, and has considered moving. But living in a cheaper part of Auckland would make it much harder to get to her job, where she works six days a week.
Sometimes she has to turn to her sons for help. She refuses to move in with them – that’s what really old people do – and has tried taking in a boarder to help reduce the cost, without success – ‘‘there’s some nutcases out there’’.
‘‘No mother should be relying on her kids. I want to be on my own, I need to be independent.’’
She says it’s demoralising knowing that she is being paid the bare minimum her employer legally can.
‘‘I work just as hard as the next person. I put my heart and soul into my job, I go the extra mile to make sure it is done in the correct manner. Why am I doing extra and they’re not giving me any extra?’’
The minimum wage is currently $15.75, rising to $16.50 in April 2018. The Government has signalled it will continue to increase to $20 by 2021, or 27 per cent over just under four years.
The prospect is exciting, Walters says.
‘‘If I got $20 I’d be able to buy myself a good little car. I’d be saving. I could keep up with rent. I could do a normal, proper shopping.
‘‘I’m eating bread and butter and a cup of tea lots of times. I can’t afford to use power. The budgeting I could do on [$20] would be so awesome. I would be ecstatic. I’d be the happiest woman in the world.’’
Unions described the move as a ‘‘great start’’. ‘‘This will make a huge difference to the dignity of the many, many people who are working hard for low wages in this country – many more than there should be,’’ CTU president Richard Wagstaff said.
But some commentators have questioned the impact the increase will have on the economy.
In a slowing economic environment, it’s been suggested that an increase might put pressure on the country’s many small businesses to increase their costs or, if they cannot do that, reduce their staff numbers.
New Zealand’s minimum wage is already high by international standards, when compared to the country’s median wage. At $15.75, it is 67 per cent of the median average earning of $23.50 an hour. In the United States, the minimum is more like 40 per cent.
Eric Crampton, chief economist at the NZ Initiative, says it’s that relativity that alters how businesses might respond.
‘‘The closer it gets to the median, the greater the number of workers affected. The more people affected, the stronger the effect on unemployment,’’ he said.
Some firms would adapt to the higher wage bill by becoming more ‘‘capital intensive.’’ He pointed to McDonald’s, which is already replacing counter staff with automated kiosks at many outlets around the country.
Others might tweak other benefits they offered their staff – including shift flexibility, the number of hours worked or even things such as parking spaces provided.
‘‘Whether they think about air conditioning to make it a more pleasant place to work . . . These are all part of the overall compensation bundle when you’re thinking about attracting workers.’’
‘‘If the value they provide to the business isn’t big enough to justify an increase in the salary,