Extra 75c an hour adds up to $31m

Sue Bradford

Rest homes have sent the Government a bill for $31 million to meet the cost of an 8 per cent minimum-wage increase due on March 27.

The bill - likely to be the first of several from low-wage sectors - comes as Green MP Sue Bradford yesterday gave half of her recent back pay, $850, to a union campaign to raise the minimum wage further to $12 an hour.

The Government-appointed National Advisory Council on the Employment of Women has also weighed in, urging ministers to provide "funding increases so that Government employers and subcontractors are resourced to meet the higher labour costs" from the new minimum wage.

Labour Minister Ruth Dyson announced before Christmas that the minimum wage would rise from $9.50 to $10.25 an hour from March 27.

The Labour Party agreed with New Zealand First and the Greens after the election to raise the minimum to $12 an hour by the end of 2008 "if economic conditions permit".

Max Robins of Healthcare Providers of New Zealand, which represents rest home operators, said his group wrote to district health boards last week seeking an extra $31 million to cover the flow-on effect of the minimum-wage rise for rest home caregivers, laundry workers, cooks and cleaners.

He said it was impossible to cover the cost through higher fees to patients because the maximum fees were fixed by regulation. And the commercial operators that had bought rest homes from charitable agencies in the past two years were not willing to take losses.

"If we don't get the money in this year's Budget, we are going to have another severe impact on the workforce," he said.

"Across the aged care sector there is a huge consolidation going on. People are tightening their labour costs wherever they possibly can. Lots of them are running at tighter staff ratios than the charitable sector, but there is a point beyond which you can't cut."

Home Health Association executive officer Jane Cumming said her group had not yet worked out the cost of the minimum wage rise for home care workers, but it was likely to be about 8 per cent of the $200 million which the Government now pays for home care.

Home care workers are among the lowest-paid in the country. Ms Cumming said they earned an average of $11 an hour, but most did not get paid for the time or cost of travel between clients.

Her group will meet Health Minister Pete Hodgson on February 8 to seek help in this year's Budget.

"Pete Hodgson has decided that the best place to break the cycle of poor wages is to address the travel problem. We agree that that is a good way to start," she said.

The Nurses Organisation will join the Council of Trade Unions and other unions representing low-paid workers at an event in Auckland today to "make poverty wages history".

The National Advisory Council on the Employment of Women, in a submission on the minimum wage released to the Herald under the Official Information Act, said 29 per cent of women and 18 per cent of men earned less than $12 an hour in the last survey in 2004.

"Moderate increases" in the minimum wage would help women achieve equal pay for work of equal value.

Council chairwoman Suzanne Snively told Ms Dyson in a follow-up letter that the Government should provide the funding needed to pay higher wages in low-wage sectors such as homecare and cleaning.

"We strongly recommend that the extension of the minimum wage is implemented in a staged manner, and that the number, level and timing of increases to the minimum wage rate are signalled early to employers to allow them to prepare for the impact of this on their businesses."