Lifting minimum wage 'would cost 6000 jobs'

TRACY WATKINS
Last updated 05:00 23/05/2011

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Employers and the Government have hit back at Labour's plan to raise the minimum wage to $15, claiming it would cost 6000 jobs.

Labour leader Phil Goff told the Labour Party congress in Wellington yesterday he would lift the minimum wage in his first year in government.

He batted back suggestions that employers could not afford the wage rise and said people could not afford to live on $13 an hour either.

"People on the minimum wage got 25 cents an hour under the last lift in the minimum wage; that's not enough for the hard working people that are out there cleaning our hospitals, cleaning our schools, doing jobs that other people in the community would rather not do. We've got to give them a living wage."

But Prime Minister John Key said the Labour Department had calculated a lift to $15 an hour would cost 6000 jobs.

"Labour has learnt absolutely nothing in 2 1/2 years. This is the same prescription that got us into trouble."

The Government had increased the minimum wage from $12 an hour to $13 an hour and believed it had struck the right balance, he said.Business NZ chief executive Phil O'Reilly said Labour's policy was "the worst possible news" for young people on the dole.

"The very last thing you would want to do is make it harder to employ them. I just don't understand where Phil Goff is coming from with this.

"He already knows the reason why there's such high youth unemployment right now is we don't have a youth minimum wage."

Faced with such a steep rise in costs, businesses would probably lay off staff, Mr O'Reilly said.

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- The Dominion Post

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