Wage rise not enough

WANTING MORE: Palmerston North MP Iain Lees-Galloway says increasing the minimum wage by 50c is not enough.

The minimum wage has been raised by the Government for the ninth year in row but, Palmerston North MP Iain Lees-Galloway says it will provide little relief.

On Tuesday last week, National announced the minimum hourly rate would increase by 50c, taking it to $15.75 in April. But Mr Lees-Galloway, who is Labour's spokesperson for Workplace Relations, labelled the hike a cold comfort to many.

"Fifty cents an hour is simply not enough to keep up with enormous increases in housing costs that many New Zealanders currently face. A 3.3 per cent increase in wages is nothing when rents were up by 8.5 per cent last year and house prices rose by 12.5 per cent."

National's Workplace Relations and Safety minister Michael Woodhouse said there would also be an increase to the starting-out and training minimum wage rates from $12.20 to $12.60 per hour.

"The Government is committed to striking the right balance between protecting our lowest paid workers and ensuring jobs are not lost," he said. "An increase to $15.75 will benefit approximately 119,500 workers and will increase wages throughout the economy by $65 million per year."

Annual inflation was currently sitting at 0.4 per cent and was the perfect environment to support the increase, he said.

" ... a 3.3 per cent increase to the minimum wage will give our lowest paid workers more money in their pockets, without hindering job growth or imposing undue pressure on businesses."

Mr Lees-Galloway disagreed.

"If Labour was in Government the minimum wage would currently be around $16 an hour. In setting it we would take into consideration the real cost of living including housing costs and the real costs that directly affect low income people, balancing those needs with what businesses are able to absorb."

According to a 2015 OECD report, New Zealand sits among the top countries for minimum wage rates. It stated removal of the sub-minimum wage for 16-17-year olds in 2008 effectively resulted in a 28 per cent increase to this group's minimum wage.

It claims this increase accounts for the 20-40 per cent fall in the proportion of 16 to 17-year olds in employment in 2010.