More than 100,000 low-paid workers will get a pay rise in
little more than a month after the Government yesterday said
the minimum wage would rise by 50c an hour to $14.25 from
The increase, announced by Prime Minister John Key, was
double the widely expected 25c rise but leaves the legally
allowable pay rate well short of what campaigners for the
$18.80-an-hour "living wage" believe is necessary as a bare
minimum to sustain a small family with one fulltime and one
part-time wage earner.
Announcing the increase and a rise100,000 in the "starting
out" and "training" minimum wages of 40c an hour to $11.40,
Mr Key said a string of increasingly positive economic
indicators represented "hard-won gains" that the Government
wanted to build on.
"We know there's a balance between raising the minimum wage
and making sure we don't put businesses or jobs at risk or
create a disincentive for firms to hire new employees.
Today's announcement strikes the right balance."
He said the increase would have a negligible effect on the
availability of jobs, while a slightly higher rise - to
$14.50 - would have cost about 2300 jobs, ministers were
Mr Key said the increase would affect about 109,000 people -
the 54,000 on the minimum wage, and about 55,000 others now
earning an amount between the current and new minimum wage.
The Rev Charles Waldegrave, one of the Anglican Family Centre
researchers pushing for a $18.80 living wage, said
yesterday's increase was a move in a good direction.
"It's better than the 25c that was probably expected and a
50c-an-hour increase will clearly make something of a
difference for people. It won't take families with children
out of poverty but it will certainly ease the load to some
Labour's policy is to lift the minimum wage to $15 within 100
days of taking power and to lift it further within nine
months. Labour MP Darien Fenton said the Government had "once
again blown an opportunity to give Kiwi workers on the
minimum wage a decent pay rise".
"Today was the perfect time for John Key to send a message
that in his 'rock star' economy, the low paid can expect a
fair share. He didn't. Instead he's singing from the same old
National songbook and some 200,000 Kiwi workers will still be
taking home less than $15 an hour."
Council of Trade Unions economist Bill Rosenberg said the
increase was "unfair given several years of stagnating wages,
an economy that is starting to grow, and widespread concerns
about how that growth will be shared".
Act leader-elect Jamie Whyte said it was "hard to think of a
crueller policy" for people most in need of work than
increasing the minimum wage.
Mr Key hadn't acknowledged "the unseen effects of minimum
wages". "Those businesses which don't directly lay off
workers will be discouraged from employing more, or replacing
those who leave voluntarily in future."
Striking the balance
$13.75 Current minimum wage.
$14.25 New minimum wage which Prime Minister John Key says
will have a "negligible effect" on jobs.
$14.50 Would cost about 2300 jobs, according to advice to
$18.80 What living wage campaign is calling for, up from
$18.40, but which would cost 25,000 jobs, according to Labour
Minister Simon Bridges.
54,000 People now earn the current minimum wage.
55,000 People now earning between $13.75 and the new minimum
wage of $14.25.
- Adam Bennett of the NZ Herald