Minimum wage increases to $15.25 an hour

Workplace Relations minister Michael Woodhouse

The government has announced a 50c increase to the minimum wage from $14.75 to $15.25 an hour effective on April 1.

Workplace Relations Minister Michael Woodhouse says an increase to $15.25 per hour will directly benefit approximately 152,700 workers and will increase wages throughout the economy by $75 million a year.

“With annual inflation currently at 0.1%, an increase to the minimum wage by 3.4% gives our lowest-paid workers more money in their pocket, without imposing undue pressure on businesses or hindering job growth,” he says.

The starting-out and training hourly minimum wages rates will increase from $11.80 to $12.20 per hour.

The government has increased the minimum wage every year since it has been in power, with the hourly rate at $12 in 2008.

Today’s announcement comes in above expectations, with Mr Woodhouse himself previously saying the government was considering increasing the minimum wage to at least $15 an hour.

Employment and Manufactures Association (EMA) chief executive Kim Campbell has been a long-standing critic of increases to the minimum wage.

Last year when asked about the increase in the minimum wage, Mr Campbell called it nutty” and maintained that attitude when asked about the possibility of a hike late last month.

“The minimum wage is not the default setting. It should not be the default setting for all wages but, unfortunately, that’s what it’s become,” he said.

He is concerned the minimum wage hike will make New Zealand “uncompetitive,” as pressure on the lower end will, in turn, lead to headline wages going up.

Traditionally, wage increases are tied to inflation. With consumer price index inflation at all-time lows – falling 0.5% in the December quarter of last year – there will be many scratching their heads over the increase in the minimum wage.

Green Party workplace relations spokeswoman Denise Roche says $15.25 is not good enough.

“Our policy is that the minimum wage should progress to keep pace with the cost of living, and inflation,” she says.

She says the Greens' policy at the last election was to gradually increase the minimum wage to a living wage, which would be $19.25 an hour.

“The minimum wage is still not enough to live on,” she says.

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Another half witted populist decision by our Government. Ensuring that New Zealand becomes even less competitive in the world market that we rely on for our trade and prosperity.
MIchael Woodhouse shows how naive and out of depth he is in his portfolio, as an ex academic and accountancy employee perhaps we should not be surprised. He says it will increase wages for about 152,700 workers and salaries by $75 million. So is he that far out of touch that he thinks there won't be increases right across the board to maintain relativity?
Slowly but surely we are being left behind, the minimum hourly wage in Colorado is US$8.31 and 8.51 Euro in Germany. In both of these states/countries the rich are richer than our top earners, the poor are richer than our poor and the middle class are ahead as well. Just raising wages without increases in productivity is making us less and less competitive. We expect those sort of decisions from the wackos on the left but not from a centre right government that is supposedly friends of business and keen on business success and employment.

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