Minimum wage hike worries retail group
Clare Borck says plans to lift the minimum wage will make a big difference to her life.
The country’s minimum wage is set to soar to $20 within four years under a new coalition deal set by the incoming government.
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 an hour.
At the moment, Borck works for an agricultural contractor and is paid $18 an hour.
‘‘I do get guaranteed 40 hours a week in the winter but from October till June I do an average of 60 hours up a week,’’ she said.
‘‘It’s hard work and I’m operating very expensive machinery. By the time I pay for petrol to get to work, after-school care in the winter and [an] au pair in the busy months I am better off being on the [unemployment] benefit.
‘‘Don’t get me wrong – I love my job. I could make the move south and get $30 an hour but no work over the winter.
‘‘I’ve been a bank manager and run a contracting business for five years and studied business but I like working out of the office.’’
With the planned increases, she said, ‘‘by 2021 at least I can earn a bit more’’. She said that would be a big help. ‘‘If they want people to get off the benefit then they need to make it less of a struggle to be in the workforce.’’
E tu¯ national secretary Bill Newson said the extra pay would be welcome for many workers.
‘‘It might not sound a lot for the privileged elite who have got a lot from the Government over the past few years. But it means a lot to ordinary working people trying to support families on low pay.
‘‘Let’s remember we’re talking about a minimum and there’s a lot of evidence that shows a Living Wage today needs to be $20.20, so there is still a way to go,’’ he said.
He said it had taken the National-led Government five years to lift the minimum wage by $3 an hour.
‘‘It will take this government three years to lift it another $4; we can live with that.’’
But businesses are worried about how they will cope.
Prime Minister-designate Jacinda Ardern said her tax working group would be asked to look at how Australia’s tax regime operates. Firms there with annual turnover of less than A$10 million pay a lower company tax rate.
Ardern said she had a genuine interest in supporting those who create jobs in New Zealand.
Greg Harford, of Retail NZ, indicated some assistance could be needed.
‘‘Many retailers will be concerned about the large and rapid proposed minimum wage increases,’’ he said.
‘‘Retailers generally do want to pay their staff well, but their businesses need to be able to do so.’’
Harford said the roughly 16,500 small retail businesses in New Zealand typically operated on low single-digit margins and could struggle under more pressure.
‘‘In many cases, the owners of businesses are struggling to pay themselves the equivalent of the minimum wage, so increases in wage bills that aren’t supported by increased turnover may well reduce the viability of some of these businesses.’’