Unions have slammed as unfair a planned 50c an hour rise in the minimum wage as Opposition MPs promise an immediate rise of another 75c an hour with more to follow.
Prime Minister John Key said the decision to lift the minimum wage from $13.75 to $14.25 an hour from April 1 was made against the background of an improving economy, with a fall in unemployment to 6 per cent.
The rise would have a negligible effect on jobs, although it was estimated 2300 would have been lost if the minimum wage had gone up to $14.50, he said.
"I accept people will always want more."
But Council of Trade Unions economist Bill Rosenberg said the increase was unfair given several years of stagnating wages, an economy that was starting to grow, and widespread concerns about how that growth would be shared.
The first step should be an increase to $15.50 this year.
"The minimum wage is the only way, other than through the tax and benefit system, that the Government has to ensure wage and salary earners, and particularly people on low incomes, benefit from a growing economy," he said.
"Instead almost half of employees are getting no wage or salary increases at all. This minimum wage increase goes little distance to addressing the inequalities in society."
Green Party co-leader Metiria Turei said the rise represented an increase of just $2.25 an hour in six years under National, or $4500 a year for a full-time worker.
"That compares to the $35,500 a year increase in the prime minister’s salary over the same time." Labour’s associate spokeswoman Darien Fenton said the minimum wage would rise to $15 an hour in the first 100 days if Labour won office.
Key had missed an opportunity to send the message that "in his 'rock star' economy, the low paid can expect a fair share".
"While salaries at the big end of town might have continued their upward trajectory under this Government, in real terms the minimum wage has actually decreased."
Turei said the Greens would also lift it to $15 immediately and work quickly towards a living wage – currently defined as about $18.80 an hour – for all workers.
"Well-paid CEOs might claim that a fair minimum wage would cost jobs but evidence from around the world shows that is just not true. A higher minimum wage puts more money in families’ pockets, giving them more money to spend, and that creates jobs."
Rosenberg said more than 100,000 people were on or close to the new minimum wage and well over 200,000 would have benefited from an increase to $15 according to official figures from 2012.
Meanwhile, Labour Minister Simon Bridges said the starting-out and training minimum wages would also increase, from $11 an hour to $11.40 an hour – 80 per cent of the adult minimum wage.
"The increase announced today balances the needs of both businesses and workers and will have minimal impact on the wider labour market and inflationary pressures."
It keeps the minimum wage at about 50 per cent of the average hourly rate.
- © Fairfax NZ News
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