Radio New Zealand - Te Reo Irirangi o Aotearoa

Minimum wage rise good for economy, say unions

Updated at 5:55 am on 24 May 2011

Unions are dismissing the Government's claim that raising the minimum wage, as promised by Labour, would cost thousands of jobs.

Prime Minister John Key says the Labour Party's pledge to increase the minimum wage from $13 an hour to $15 an hour would put 6000 people out of work.

The Service and Food Workers Union says the minimum wage and unemployment levels are unrelated, and that an increase would actually be good for the economy because people would have more money to spend.

The Engineering, Printing and Manufacturing Union says lots of older workers in jobs such as cleaning or aged care are on the minimum wage and increasing the rate would improve their situation.

It says the real issues affecting youth unemployment are skills and experience, not the level of pay.

But Mr Key says the most effective way of raising wages is to have a highly productive economy.

Labour leader Phil Goff says people cannot live on $13 an hour when prices are going up. He says everyone who works deserves to have an income that allows them to sustain their family.

Youth rate suggested

Business Round Table chairman Roger Partridge says a rise in the minimum wage would push mainly younger workers out of the workforce.

He says the youth unemployment rate is already too high, and the Government should consider re-introducing youth rates, which he says would allow employers to take on 15- and 16-year-old school leavers.

As at March 2011, 27.5% of 15- to 19-year-olds were unemployed.

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