Mixed reply to minimum wage rise

Dunedin-based union representatives and employers have reacted with a mixture of delight and "real concern'' to yesterday's biggest single boost in the country's minimum wage - up $1.20 to $17.70.

Otago Employers Association chief executive Virginia Nicholls said many Otago employers were "really concerned'' about the size and frequency of minimum wage rises.

Business compliance costs were also rising, she said.

The rises were pressuring profit margins, and in a competitive marketplace many employers could not simply pass the increased costs on to customers.

The issue was not just that of increased pay for the lowest-paid, but that it also led to pressure from other workers because margins became compressed between new employees and staff with more experience and further skills, she said.

Dunedin supermarket worker Phil Rennie felt "happy and grateful'' about the increase - "for me it's positive''.

Mr Rennie was an amateur photographer and "really passionate'' about it.

Having additional money coming in would help him save for better equipment and "add quite a lot'' to his life.

The increase also meant that he and other Dunedin workers would feel more valued in the workplace, resulting in wider positive benefits, he said.

First Union organiser Sonja Mitchell said the minimum wage increase would make a big difference to workers' overall enjoyment of life.

She believed there would also be some wider economic benefits as Dunedin's low-income workers spent more money in the city, with benefits for other business activity.

There was "a long way to go'' to catch up on worker needs, but this was a good early step, she said.

Otago Chamber of Commerce chief executive Dougal McGowan said some employers, particularly larger ones, who had planned for the increase and worked towards it could be "OK''.

But other employers, including some cafes and supermarkets, were finding the situation "quite difficult''.

"We don't want businesses to go broke and close down,'' he added.

The chamber was "looking to make sure'' that any employers who were having trouble with the higher minimum wage were properly supported, he said.

Etu Otago organiser Ann Galloway said the minimum pay rise was a "wonderful'' step which would benefit many low-paid Dunedin workers.

"It certainly will make a difference to how they live their lives,'' Mrs Galloway said.

"It's the difference between buying lunch for your [school] kids or not,'' she said.

Unite Union Otago-Southland organiser Angus Wilson, who represents low-paid fast food workers, said the minimum pay rise was "fantastic'', and was a "good start'' after a long period of low pay movements.

Dunedin would benefit from having more money in circulation and more employee buying power, and staff could now afford to buy themselves a few more things, such as "work shoes'', he said.

 • The Living Wage Movement Aotearoa New Zealand yesterday announced the living wage will rise by 60 cents in September, from $20.55 to $21.15 per hour.

The living wage is defined as the "income necessary to provide workers and their families with the basic necessities of life''.

john.gibb@odt.co.nz