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Home / Hawkes Bay Today

Minimum wage rise puts pressure on

By Patrick O'Sullivan and Victoria White
Hawkes Bay Today·
29 Feb, 2016 07:42 PM4 mins to read

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Hawke's Bay Fruitgrowers Association president Lesley Wilson.

Hawke's Bay Fruitgrowers Association president Lesley Wilson.

Hawke's Bay wage rates will increase thanks to an increase in the minimum wage but an increased living wage may not be sustainable.

Yesterday the Government increased the minimum wage by 50 cents an hour to $15.25 before tax, effective from April 1.

The living wage is $19.80 before tax.

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

Hawke's Bay Fruitgrowers Association president Lesley Wilson said the industry had absorbed many cost increases over recent years and would absorb this one.

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"We're lucky at the moment, the industry is doing well and we will just have to put systems and processes in place to cope," she said. "Many people in the industry earn above minimum wage and most growers have wage systems which cope pretty quick."

Federated Farmers Hawke's Bay president Will Foley said competition for skilled beef and sheep workers ensured wages stayed well above the minimum level but it could affect dairy workers.

He said jobs were already on the line due to low milk prices and an upward pressure on wages would not help - farm owners were increasingly milking cows themselves. "That's one cost they can cut out."

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The increase was welcomed by local E Tu union organiser Thomas O'Neill. He said with stagnation in wages and women still facing lower pay the minimum wage increase went "some way to address the problem".

"So thank you very much John [Key], but where's the rest?"

Hawke's Bay Chamber of Commerce CEO Wayne Walford said he agreed with the increase as long as it didn't jeopardise jobs.

"I think it's a good move, but there are business owners I know of which hardly sleep on Wednesday night for fear of the payroll not going through," he said.

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While there were some businesses the increase wouldn't "make a drop of difference to" there were others which would find the increase stressful, as it would add more to the cost of employment.

"It might be 50 cents but at the end of the day it can be a big difference."

Yesterday the 2016 New Zealand living wage was also increased, by 55 cents to $19.80 an hour, coming into effect on July 1.

It is the hourly wage a worker needs to pay for the necessities of life and participate as an active citizen in the community, as calculated by the Anglican Church's Family Centre research until for a family of two adults and two children, with one adult working 40 hours and one 20 hours a week.

"That one scares me," Mr Walford said. "That can send some businesses to the wall. If you add that across 40 hours and compound that across staff ... how do they [businesses] get that back?"

The region's biggest single employer, the Hawke's Bay District Health Board (DHB), last week received a report from its Maori Relationship Board calling for the DHB to adopt a "highly achievable" policy that would help influence others to "decrease poverty and improve equity".

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DHB Maori Health general manager Tracee Te Huia told Hawke's Bay Today the DHB's sought to provide "excellent health services" to improve health and wellbeing and reduce health inequities.

To that end it produced the Health Inequity report in 2014.

"One of its key findings was that by reducing poverty you reduce inequity," she said.

A proposal was being developed to identify the cost to the DHB of paying all of its 2800 workers at least the living wage, which until yesterday's increase was 265 including part-time jobs.

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