Change to minimum wage settings

Last updated 12:43 14/11/2012

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The Government is being accused of silencing the voice of low-paid workers through plans to streamline the way the minimum wage is assessed and set every year.

The Government considers public submissions when it reviews the minimum wage every December.

It also takes into account more than 20 factors including: unemployment, productivity, inflation and the principles of fairness, protection, income distribution and work incentives. The impact on new migrants, women, Maori, Pacific people, the disabled and part-time workers is also considered.

It is understood the Government wants to reduce that to four factors: inflation, wage growth based on the medium wage, employment and the impact on jobs, and ''other factors'' which could include changing conditions.

It also wants to only consider public submissions every four years but will consult Business New Zealand and the Council of Trade Unions annually.

The current review process costs about $100,000 and the changes, which are expected to be considered by Cabinet before the end of the year, would save about $60,000.

Labour's industrial relations spokeswoman Darien Fenton said principles like fairness should not be stripped from the review.

''It offers protection for workers who have little or no bargaining power.''

Labour was concerned minimum wage increases would become inflation indexed which would lead to ''tiny'' rises in some years.

The $13.50 minimum wage was already less than half the $27 medium wage for men.

Reducing submissions to every four years was ''cutting out the voices of people who want to have a say in this''.

Unite Union national director Mike Treen said low-paid workers were already marginalised.

''We are constantly coming across illegal work practises even with the minimum wage as it is. This is the most vulnerable workers in the country and their voices are vital.''

Unite made submissions every year and felt it was an important process.

''It's a relatively minimal process they go through now. They are written submissions, there are not big hearings on this.''

Treen said the Government was narrowing down the criteria to increase the weight of the argument against raising the minimum wage each year.

''The argument in the previous National government in the 1990s was that lowering the minimum wage increases job opportunities and you see that idea creeping back with the introduction of youth rates.''

The changes won't come into effect for this year's review.

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