1 Apr 2016

Is the minimum wage increase helpful or hopeless?

12:55 pm on 1 April 2016

About 150,000 workers will get a 50 cent-an-hour pay increase from today with the minimum wage rising to $15.25.

Mike Egan at Monsoon Poon, one of the Wellington restaurants he owns.

Restaurant owner Mike Egan says he does not begrudge the rise in the minimum wage. Photo: RNZ / Max Towle

The starting-out and training hourly minimum wages rates will also increase from $11.80 to $12.20 per hour, remaining at 80 percent of the adult minimum wage.

But a cleaner who does night shifts at Auckland Council said the rise was still not enough to make it easier to support her family.

Before today, Lupe Funua's wage was $15.10. That rate would be pushed up 15 cents to match the new minimum wage.

With a three-year-old son at home, a baby due in a few months, and a husband who was also a cleaner on minimum wage, she said every week she worried she was not earning enough.

The couple left their son with relatives when they worked through the night.

"I really need to save some money for my children's better future so I can send them to university without a student loan," she said.

"I also need to feed them, clothe them, everything - everything is expensive."

Also taking effect on April 1:

  • Paid parental leave is increasing by another two weeks to 18 weeks
  • Extra money for poorer families - $25 a week for beneficiaries with children, $24.50 for family salary less than $27,000
  • New Zealand superannuation will increase by 2.7 percent
  • Zero hour contracts will be banned
  • Once the bills were paid, she said she had nothing to send home to her parents in Tonga, which devastated her.

    She wanted the living wage, which advocates had set at $19.80.

    Members of Living Wage group with signs showing the 2016 living wage rate.

    Members of Living Wage group with signs showing the 2016 living wage rate. Photo: RNZ / Maja Burry

    "That is big money for me. That way I can survive with my family and save more money for my kids' future."

    There were many others in a similar position, said Council of Trade Unions president Richard Wagstaff.

    He said the government was just treading water.

    "We're looking for the government to do something more substantial and preferably close that gap and get to the living wage," he said.

    "Our submission is that in fact the minimum wage should be two-thirds of the average wage, which would make it more than $20."

    Police Minister, Michael Woodhouse.

    Workplace Relations and Safety Minister Michael Woodhouse Photo: RNZ / Alexander Robertson

    Workplace Relations and Safety Minister Michael Woodhouse said the government first considered a 25-cent rise, but decided to be more generous.

    He said lifting the rate any higher would mean some people losing their jobs.

    Federated Farmers dairy chairman Andrew Hoggard said any rise would affect the struggling dairy industry.

    "I think the concern for farm employers might be around farmers employed in the roles above those on the minimum wage - farm assistants - who would also get a boost," he said.

    "That's going to be the discussion that farm employers will have with the employees and for many it's not going to be an option."

    Mike Egan owned a few restaurants in Wellington and was also the president of the Restaurant Association.

    With mostly kitchen hands on the minimum wage, he said there would be plenty of staff above them who would get a boost.

    "We value our staff and as they become more valuable to our business, we want to reward their loyalty and work ethic - you can't just have the bottom people going up," he said.

    He did not begrudge the minimum wage going up and said it all added up to a better economy.

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