Minimum wage rise hits home at Beehive

The minimum wage rise to $20 at the start of April has been blamed for a price increase at a cafe opposite Parliament in Wellington.

At the start of this month the minimum wage rose 5.8 per cent to $20 an hour from $18.90, as part of a series of increases over three years.

It was first signalled in 2017 when the minimum wage was $15.75.

On Friday, National MP Christopher Luxon said he had seen a sign at Cellar-vate cafe, operated by owners of the neighbouring Backbencher pub, about prices going up after the minimum wage hit $20.

‘‘It illustrates the reality for small businesses of the recently implemented minimum wage increase from $18.90 to $20,’’ he said in a Facebook post.

Laura Tantrum, duty manager at Backbencher, confirmed prices had recently risen at Cellar-vate.

‘‘It’s to cover costs, so we can afford to pay staff at minimum wage.’’

Feedback from customers had been good, although some staff were initially apprehensive about the increase, Tantrum said.

‘‘Everyone understands, they’re very happy people are being paid the minimum wage,’’ she said.

Retail NZ chief executive Greg Harford said the minimum wage rise was one of a number of factors – including increased sick leave and rising costs such as freight and power – currently putting pressure on businesses.

‘‘We’re getting really solid feedback on the need to put prices up,’’ he said.

‘‘A lot of stuff is feeding into that inflationary narrative.’’

A recent Retail NZ survey of retailers showed a third expected to cut employee hours as a result of the minimum wage rise.

Unite Union Aotearoa national secretary Gerard Hehir said the proportion of the workforce paid the minimum wage was fairly small. They tended to spend the increase in the areas they lived and worked in, so the money went back to the community.

Most minimum wage workers in hospitality were not able to get 40 hours’ work a week, with 30 hours quite common.

‘‘If people can’t afford to live on their wages, the taxpayer – and that includes businesses – ends up propping them up.’’

Most people accepted the minimum wage, and the effect of a $1 rise was ‘‘minuscule’’, he said.