23 May 2011

Minimum wage rise 'would cost thousands of jobs'

4:25 pm on 23 May 2011

Prime Minister John Key says 6000 people would lose their jobs under the Labour Party's plan to raise the minimum wage to $15 an hour.

At its election year congress in Wellington on Sunday, Labour promised to raise the minimum wage by $2 an hour to $15 an hour in its first year in office.

Mr Key says the advice from the Department of Labour is that raising the minimum wage too quickly would result in thousands of job losses. He says Labour has learnt nothing since it was last in power

Business New Zealand chief executive Phil O'Reilly says at a time of very high youth unemployment, there is no logic behind increasing the minimum wage.

He says employers would fill vacancies with older people because of their higher skill levels.

Labour leader Phil Goff says Labour also plans to boost skills training to ensure every young person is either in a job or being trained.

He says New Zealanders understand such measures are needed if the economy is to recover and high incomes are to be restored.