Minimum wage rates about to go up for lowest-paid workers

Young workers will receive a $1-an-hour pay increase from March, Labour Minister Margaret Wilson announced yesterday.

The increase will take rates for 16 and 17-year-olds to $6.40 an hour, up from $4.20 two years ago. The adult minimum wage will increase 30c an hour to $8.

Ms Wilson said the adult increase would affect about 5500 workers and the youth increase about 6900. Both increases would take effect on March 18.

"This year will also see the implementation of the training minimum wage once the Minimum Wage Amendment Bill comes into force.

"This will remove the current training exemption requiring the payment of minimum wage rates and replace it with a training minimum wage in line with the youth minimum wage of $6.40."

The adult increase was based on annual average wage growth, and the youth increase was bigger to keep it at 80 per cent of the adult rate.

Business NZ executive director Anne Knowles said workers with the least skills, qualifications and experience could be disadvantaged by the increases because they would be competing with skilled workers for comparable pay.

"The smaller the margin between the minimum wage and the next wage level up from that, the harder it becomes for unskilled people to get jobs."

Council of Trade Unions secretary Paul Goulter welcomed the announcement but said the increase was still not enough.

The CTU had sought an increase based on 50 per cent of the average wage, which would have taken the adult minimum to $9.10 an hour.

- NZPA