25 Feb 2014

'Timing right' for 50c rise

11:48 am on 25 February 2014

The Auckland Chamber of Commerce says the timing is right for a rise in the minimum wage, because many businesses' finances have improved.

The Government anounced on Monday that the hourly rate for the minimum wage will go up by 50c an hour to $14.25 an hour in April, while the starting-out and training minimum wage will rise by 40c to $11.40.

Council of Trade Unions secretary Peter Conway says the rise will make a small difference but life on the minimum wage will still be a struggle.

However, the chamber's chief executive, Michael Barnett, says it was set up to stop workers being exploited, not as a renumeration benchmark. "To my mind it should be an incentive to work for those who are not, and it should be an incentive to unions and government and employers to train."

The Prime Minister, John Key, said on Monday that a 50c rise strikes the right balance between protecting low-paid workers and ensuring jobs are not lost. He says there will be a relatively negligible loss of jobs, whereas raising the wage to $14.50 would have resulted in the loss of more than 2000 jobs.

Mr Key says an improving economy was behind the decision to raise the wage.

CTU president Helen Kelly says the Government should not brag about that. The minimum wage in Australia is much higher, she says, because the average wage is higher, so the New Zealand wage simply reflects the fact that the average wage is very low.

Ms Kelly says the union would like to see the minimum wage lifted to $15.50 this year and increased to two-thirds of the average wage over three years.