Minimum wage row looms

Jobseekers may be thrilled to hear the news that the government is looking at raising the minimum wage, but it might not be such a windfall for less experienced workers and those heading for their first job.

David Lowe, manager of advisory services for the Employers and Manufacturers Association (EMA) says his members report that if the minimum wage goes too high, it could backfire on workers.

"Some of those we have spoken with would prefer to look at the number of hours people worked.

"Others said, 'well we have been thinking of hiring more people but maybe we won't now and we'll just wait and see what happens'."

In an EMA survey, 70 per cent of organisations said that raising the minimum wage to $12 would badly or very badly affected them. And that could spell bad news for young people seeking work experience or their first job.

"Some of the comments back were, 'if we had to pay $12 an hour, then I'd rather hire a more experienced worker rather than give these people straight out of school an opportunity'."

Lowe says minimum wage workers should be happy with an increase to $10 an hour which 60 per cent of organisations surveyed would accept.

"That's still a significant increase. It's actually more than five per cent. So it's not a miserable increase."

But Carol Beaumont, secretary of the Council of Trade Unions, couldn't disagree more. She has been running a wage campaign to lift New Zealand wages which she says are too low.

"The minimum wage is very low. You know $9.50 an hour if you're 18 plus is certainly [when you look at the average household costs] not exactly a huge amount of money when people are trying to pay rent and all of those other costs."

Beaumont says no one should be paid the current minimum wage and has tips on how young workers can earn more.

"They should find out as much information as they can by talking to their friends and relatives about what people get paid. Be as informed as you can. Don't sell yourself short. You have got options."

To steer clear of the minimum wage, Beaumont offers tried and tested job-seeking guidelines.

* Make sure that you present yourself well.

* Be clear about your skills and experience, don't undersell yourself.

* In every industry now the requirements on people, even on entry level occupations, is far higher than it used to be. Companies require better standards of customer service.

* Companies expect that people in many occupations are able to use a computer.

The whole minimum-wage debate is somewhat less weighty because, according to Beaumont, people in most industries are already paid above the minimum wage because of today's tight labour market.

"The lowest senior rate is actually $11.50 an hour," he says. "Now that's in the supermarket industry."

But the debate is still important to Lowe who says the minimum wage has already seen some substantial increases in the past.

"Since 2000 the minimum youth rate has gone up 81 per cent. And during the same period the minimum adult rate has gone up 36 per cent."

Lowe says an increase in the minimum wage could be accepted but that an increase to $12 is simply not workable.

"There has been a cost of living increase and that needs to be reflected in the minimum wage. But it's about getting the balance right and a jump to $12 isn't getting the balance right."

During the upcoming holiday period, the minimum wage is staying right where it is.

"For those people that are looking to work over the Christmas period, the minimum wage will still be $7.80 for 16 and 17-year-olds and will be $9.50 for 18 years plus."

Beaumont says that's not good enough and workers deserve more.

"Most companies are doing well and we're saying workers are entitled to a fair share," says Beaumont.

"There is a reasonable degree of consensus now around the issue that New Zealand is a low-wage economy and that there's a need to do something."

The current uncertainty surrounding what will happen with the minimum wage is not helping anyone. Lowe said that important business decisions are being put on hold.

"We don't know what the government has in mind. They have said to move to $12 an hour by 2008, subject to economic conditions. We don't really know how that might practically play out.

"Is that nothing for three years and then it suddenly jumps up? Is it a dollar a year? Is it 50 cents one year? And of course, we know that the economy isn't performing as well as it has been."

Whatever the government does decide to do, it's unlikely to make everyone happy.