Dunedin North MP David Clark and employer representatives
are at odds over the costs and benefits of raising the minimum
wage to $15, a possibility after Dr Clark's private member's
Bill was drawn from the ballot last week.
Dr Clark said yesterday that increasing the minimum wage to
$15 per hour would ensure hard-working families could put
healthy food on the table.
Otago-Southland Employers Association chief executive John
Scandrett said Otago-Southland businesses would face
additional wage costs of more than $38 million if the minimum
wage was lifted.
"In these tight times, that is simply not sustainable,
especially for the smaller businesses."
Otago Chamber of Commerce chief executive John Christie
agreed, saying the costs of a minimum pay rise would fall
harder on the small to medium-sized enterprises (SMEs), a
sector the region relied on to create jobs and reduce
"Some small businesses are doing particularly well but we
know of others who are really struggling. The last thing we
want is additional measures that makes them resistant to
hiring extra staff."
Dr Clark was caught off guard in a television interview on
Sunday when he could not place a figure on raising the
minimum wage from the current $13.50 to his favoured $15.
However, he was not at a loss yesterday, naming $427 million
as the most likely cost.
He dismissed the arguments put forward by Mr Scandrett and Mr
Christie, saying BusinessNZ was running the "same line"
throughout New Zealand.
"Making the minimum wage $15 an hour will be a big help to
about 264,000 workers and their families."
The $13.50 an hour was well below Australia's minimum of an
equivalent $NZ19.92, he said.
"A higher minimum wage encourages employers to engage in
industries with high productivity. It means employers can't
get wealthy off the back of cheap labour," he said.
Mr Scandrett said many local businesses were marginally
profitable, at best.
"Many would tell you that the labour market is currently
seeing new levels of instability and that they are
struggling, in some situations, to maintain staff levels.
This is made worse in the face of growing employee departures
to Australia and around concerns that the approaching
Christchurch re-build would see wider worker benefits offered
beyond the boundaries of Otago-Southland."
In the face of those challenges, employers had, where they
could afford to do so, reassessed wage and salary levels and
many workers were already paid above minium wage levels.
"In other words, they are already stretched just to keep what
workforce they have," he said.
With many smaller companies potentially going out of
business, the suggested lift in minimum wage levels would
have a "most negative" effect on the local workforce, Mr
Dr Clark said an economist could be eligible for a Nobel
prize if he or she could establish a direct link between
putting up the minimum wage and increasing unemployment.
When National put up the minimum wage 70c over a period,
unemployment soared but when Labour put it up $5,
unemployment was at its lowest. There was no link, he
He was an advocate of putting up the minimum wage gradually.
If his Bill progressed through to law, the timing would mean
the wage going up from $14 to $15 as it would probably be
lifted next April from $13.50 to $14 an hour.
"The proposed change will not affect most employers and smart
employers who already pay a living wage will be better off as
it will stop less scrupulous firms undercutting them," Dr