When pay rises are a ‘slap in the face’
Wages have been rising quickly for those on the lowest incomes but some workers are concerned their experience is no longer being recognised.
As the minimum wage has increased – from $14.25 in 2014 to $21.20 this year – and more businesses have adopted the Living Wage, which has increased from $18.80 in 2014 to $23.65, it has meant there is less difference between those earning the least and those who have progressed up the pay bands.
Infometrics chief forecaster Gareth Kiernan said earlier this year that there had been compression in wages at the lower end of the spectrum.
For women, the median hourly rate earned by those receiving wages and salaries was $28 in the June quarter, according to Stats NZ. For men it was $30.85.
Financial commentator Janine Starks said that was ‘‘barely a bunny hop’’ up from the Living Wage and not a huge amount above the minimum.
‘‘The stats show us the picture quite clearly,’’ she said.
‘‘There are 2.3 million wage earners in New Zealand so half of them are crunched between the minimum wage and the median.
‘‘In terms of employment psychology it does feel like we have got a flattening of the reward for talent curve.’’
Some employees would like this, while others would become unmotivated by it, she said.
Older workers would especially feel more undervalued than others.
‘‘It drives home the focus on education and continual career upskilling to get the higher rewards.
‘‘Or people will demand the conditions they want like flexibility, hybrid working or work-from-home contracts.’’
One Countdown worker said it was a problem for the supermarket.
A union agreement will give staff a 12% pay increase over two years, meaning most people will earn between $24 and $26 an hour.
But the supervisor, whom Stuff has agreed not to name to protect their job, said it was a slap in the face for those with more responsibility. ‘‘For a supervisor like myself my hourly wage only goes up to $24.84. That is a shit increase for the amount of extra work I have to do in comparison with others that are not supervisors.
‘‘I am a supervisor and the difference from those walking in from the street to my new hourly rate is appalling.’’ She said her pay would increase by 7.8%, while a new starter’s pay would increase by 11%.
She estimated she would earn about $40 more a week.
A supervisor’s workload was more and some departments had it harder than others.
When they reached five years of work, the pay would only be ‘‘slightly better’’ at $25.65.
‘‘When you are a company earning a million dollars a week in profit, this is a slap in the face.’’
Countdown’s Australian owner, Woolworths, told investors last week it expected its New Zealand business to make a first-half profit before interest and tax of $100 million to $130m, down from $200m in the same period last year, citing ‘‘the combination of lower sales and materially higher wage inflation’’.
A Countdown spokesperson said the supermarket could not comment in detail on the collective agreement but was pleased the offer had been recommended by the union for ratification by its members.
‘‘We respect the importance of the ratification process for all members and look forward to hearing from First Union when that process is complete,’’ she said.
Louisa Jones, First Union assistant general secretary, said members voted ‘‘overwhelmingly in favour of this deal’’.
‘‘Supervisors will receive a 7.8% pay increase or an 11.3% increase if they have five years’ service. The average increase across all Countdown workers is 12%.’’
The union was unable to say how many people had voted, nor how many were supervisors, as it was an anonymous ballot.
‘‘Our First Union members are proud of this deal and for setting a new standard in the supermarket industry that lifts the floor for everyone.’’