25 Jan 2017

Workers say new $15.75 minimum wage won't help much

5:44 am on 25 January 2017

Paul Tuiloma is one of the 119,500 people who work for the minimum wage of $15.25 an hour.

Worker Mopping Floor With Wet Floor Caution Sign On Floor

Low wage earners have welcomed the rise, but say it will not help their struggle to make ends meet. Photo: 123RF

He works 40 hours a week as a cleaner at Victoria University takes home about $500 a week after tax. While the 67-year-old receives a pension, he says it is hard to pay the bills.

"I have to support my daughter at university as well as my son... I'm struggling at the moment because our rent is very high. It's over $400 a week, and that's why I have to work in order to support my kids as well as paying our bills."

On 1 April, the adult minimum wage will increase by 50 cents to $15.75 an hour.

Low wage earners have welcomed the rise, but say it will not help their struggle to make ends meet.

Mr Tuiloma said the extra $20 a week before tax would not make a significant difference.

"I reckon it should be $20 upwards [an hour] because things keep going up - rent, food, petrol, everything."

University student Caroline works 38 hours a week for minimum wage to support her studies.

An extra 50 cents an hour would not help her much. She relied on her partner's income to pay the bills. The hope of finding a higher-paid job once she got her degree kept her going, she said.

"I don't know what it would be like having that kind of feeling all the time, knowing it's not going to get much better."

Earning minimum wage made her feel she was worth less than colleagues who earned more.

Employers should pay a living wage, not a minimum wage, unions said.

Some companies and organisations like councils have adopted a living wage of $19.80.

Council of Trade Unions president Richard Wagstaff said making incremental adjustments to the minimum wage did not lift workers out of poverty.

The way the minimum wage was calculated needed to change, he said.

"If it was set to two thirds of the average wage that would be far fairer rate of pay and mean there weren't so many working poor."

Business New Zealand chief executive Kirk Hope said some employers could not afford to pay a living wage. It would push up other wages too.

Increasing the minimum wage to $19.80 was roughly a 20 percent increase without any increase in productivity. It would mean consumers would have to pay more, he said.

"We'd probably rather see taxes reduced on incomes for those earning minimum wage or changing the threshold so they kept more of what they earn," he said.

The CTU said that would let employers off the hook from paying decent wages as well as adding pressure on public services that helped create a fairer and more equal society.

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