Minimum wage rise underwhelms

03:03, Jan 29 2010
BETTER THAN NOTHING: Avenal Dairy attendant Sam White eyes up the extra money he will earn an hour when the government's 25c increase on the minimum wage rate comes into affect on April 1.

The Government announced a 25c increase on the minimum wage yesterday, but some unions say it is insufficient and demeaning.

The change in wage moves the minimum hourly rate to $12.75 for people aged 18 and older, but the Service and Food Workers Union said the increase was not enough.

Union national secretary John Ryall said the increase was positive, but did nothing to "help the financial situation of people who are barely able to survive on poverty wages". It was "insufficient and demeaning".

But Labour Minister Kate Wilkinson said the Government was working to provide a balance between protecting jobs and ensuring a fair wage.

It did not want workers priced out of the market or to prevent businesses from taking on new staff, but thought the increase was in line with inflation.

Otago Southland Employers Association chief executive John Scandrett said employers would have mixed responses, but the rise was an unforeseen factor that could add stress to already struggling businesses.


The rise could also result in workers on wages above minimum demanding increases from their employer, he said.

However, the wage increase was met by a limited response from southern workers and businesses yesterday.

H&J Smith chief executive John Green said he had not given the potential impact of the wage increase much thought but said when the large number of people on a low wage was taken into account it could have a significant effect on business.

Avenal Dairy part-time attendant Sam White, who was on the minimum wage, said the increase would have almost no effect on his life.

"If they are going to raise it, then I suppose they could do a better job of it, (but) I suppose a small improvement is better than no improvement," he said.

The wage increase before tax will bring an extra $520 a year to those working a 40-hour week. A 20c increase for people on training and new entrants' wages to $10.20 was also announced yesterday.

The new minimum wage rates are effective on April 1.

The Southland Times