24 Jan 2009

Average wage earners need pay increase, says union

10:45 am on 24 January 2009

The Engineering, Printing and Manufacturing Union says average wage earners cannot afford to go without a pay increase this year.

Prime Minister John Key has called for the Remuneration Authority to freeze MPs' salaries and says jobs could be saved if some restraint is also applied to public and private sector employee wages.

The independent authority agency sets the salaries of MPs, judges, local government representatives and some statutory officers.

In November, the salaries of MPs, ministers and the prime minister were raised by between 4% to 4.8%.

EPMU national secretary Andrew Little says people earning six-figure salaries are in a better position to absorb wage freezes.

Mr Little says a wage freeze is not helpful for most people earning the average income and pay increases simply compensate for increases in the cost of living.

He says in the past, workers have accepted wage freezes and low pay increases but that has not stopped their workmates from being made redundant.

Move concerns PSA

The Public Service Association is concerned the Government is trying to send a message about wage rises to the state sector.

The union's national secretary, Brenda Pilott, is questioning if the Government is indicating that wage rises are off the table for public servants this year.

Ms Pilott says it is hard to understand why the Government made the move now, when MPs pocketed a pay increase last November and will not have their wages reviewed until November 2009.

However, she says she appreciates that Mr Key would be embarrassed by a further pay increase.

Redundancies 'inevitable'

The Northern Employers and Manufacturers Association says job losses and redundancies will be inevitable this year.

Chief executive Alasdair Thompson says Mr Key's comments are largely irrelevant given the way consumer demand has fallen drastically worldwide.

Mr Thompson says most employers want to give their workers pay increases and they need to retain their staff when the economy picks up.