Minimum wage: Twenty five cents won’t pay the rent

Twenty five cents an hour extra will do almost nothing to transform the economy and help minimum wage workers facing rising living costs, the National Distribution Union said today.

The NDU has written to Cabinet Ministers ahead of today’s expected decision on the minimum wage, which John Key last week suggested would be 25 cents an hour.

NDU General Secretary Robert Reid said that the economy was structured around low wage jobs, and today’s wages data showed that wages for workers outside of unions remained flat.

A significant increase in the minimum wage would achieve two things, he said.

“A decent minimum wage increase would help low paid workers meet increasing costs from petrol, food and other items.”

“And it would also put New Zealand on the path towards an economy based on high labour market participation and high productivity, as firms based their competitive advantage in greater investment in capital, rather than relying on a low paid workforce.”

Robert Reid said that it was ironic that a minimum wage decision was being taken on the same day as a government working group’s report called for an even higher GST rate.

“If we genuinely want to increase household savings, all workers must have decent incomes that allow them to put some money aside for a rainy day and for their retirement.”

“Punishing low income workers, who were the losers in last year’s misleadingly titled “tax switch”, with another GST hike won’t help that”

“A 25 cents an hour minimum wage increase simply won’t be good enough. A $15 minimum wage would boost the incomes of low paid workers and help the economy. That is the message we have sent to Cabinet today,” Robert Reid said.

ENDS

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