Minimum wage rises despite calls to delay increase

Wage rise draws mixed reactions.

New Zealand’s minimum wage has risen $1.20 from $17.70 to $18.90 per hour, despite calls to postpone the increase due to the coronavirus outbreak.

The new rate equates to an extra $48 per week before tax for employees on a 40-hour working week.

The starting-out and training minimum wage rates have increased 96 cents from $14.16 to $15.12, and will remain at 80 per cent of the adult rate.

Sarah McBride, CEO of the Building Service Contractors Association of New Zealand, told Inclean NZ the association and its members were disappointed by the timing of the wage rise.

“We, along with the majority of our members, are disappointed the minimum wage rise went ahead. Businesses are already under increased pressure during these unprecedented times, so this just adds a further complication for business owners.

“We support paying our cleaners as much we can, however, we are disappointed with the timing of the announcement.”

BusinessNZ had recommended all plans for minimum wage increases be delayed for nine months or until COVID-19 recovery is confirmed.

John Milford, Wellington Chamber of Commerce and Business Central CEO, said the government’s decision to continue with the implementation to increase the minimum wage will further hurt economic recovery.

“Businesses are facing an increase in wage costs at the same time as they are facing altered and reduced trading circumstances. Many are having to reduce wages by 80 per cent just to keep the business going.

“Post lockdown we know that the economy won’t look the same, but this increase will further delay the trading and economic recovery from the COVID-19 emergency.”

Canterbury Employers’ Chamber of Commerce CEO, Leeann Watson, agreed the  increase should be postponed reducing pressure on businesses during an unprecedented and challenging time.

“Postponing the increase for nine months or until we are through the other side of COVID-19 and businesses can return to being fully operational is the most sensible option.

“We have been hearing for the last week the immense pressure businesses are under trying to pay and retain their staff, while facing the prospect of very little or no revenue during lock-down.

“This increase would add another significant financial burden to businesses – in particular small businesses. We need to be doing everything we can, right now, to support the very businesses that employ workers on minimum wage to ensure they are sustainable and viable in the long-term and so they can continue to provide jobs across our community.”

However, E tū assistant national secretary Annie Newman said the minimum wage increase is more important now than ever.

“Low paid and vulnerable workers always bear the brunt of economic downturns like the one we are facing now,” Newman said.

“While it’s not much, the minimum wage increase will make a huge difference for hundreds of thousands of workers whose jobs and livelihoods are rapidly changing.”

CTU president Richard Wagstaff said the minimum wage increase provides certainty for low paid workers.

“Within our society the people who are often paid the minimum wage are those working in roles such as supermarket workers, cleaners, rubbish collectors.

“These people have always done essential work to keep our society going. COVID-19 has shown us all what necessary work these people do, how essential their roles are, and how important it is that they feel valued in the contribution they make,”

“There is so much uncertainty all around us as we adapt to life as a consequence of the COVID-19 virus. So it is especially good that there can be some certainty for low paid workers, that this government is delivering on its promise to increase the minimum wage.”

“Employers should apply for the subsidy from government if they need it – let’s keep New Zealand working,” Wagstaff said.

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