Minimum wage increase welcomed

Fletcher Tabuteau, Rotorua-based list MP

A Rotorua-based MP and the city's Chamber of Commerce head are confident an increased minimum wage will not lead to reduced hours for local workers.

But a city union organiser has said the raise will do little to help those living on the breadline.

Last week the Government announced a rise of 50 cents to $14.75 per hour, effective April 1.

Mandatory wage rises are often criticised by business interests for increasing operating costs but Darrin Walsh, chief executive of Rotorua Chamber of Commerce, said he thought the change was fair.

"Obviously wage bills are a huge cost for small to medium enterprises, so local businesses need to look at how this will affect their overheads.

"But at the moment there is good business confidence as the economy is picking up."

He said he would be surprised if there were many cutbacks of hours for minimum wage workers.

The rise of 50 cents is a 3.5 per cent rise in the minimum wage.

The current rate of inflation is 0.8 per cent.

Fletcher Tabuteau, Rotorua-based list MP for New Zealand First, echoed Mr Walsh's view that the raise was timely.

"If you had to increase the wage now is the time to do it, as other business costs are not going up," he said, describing the 50 cents raise as "just about right - maybe a little bit low".

"But it will be noticeable for people - it all adds up," he said.

In the most recent New Zealand General Social Survey, nearly half of respondents felt they did not have enough money to meet everyday needs.

Phil Graham, a Rotorua-based organiser for the FIRST trade union, was not convinced the latest raise would be enough.

"Will these increases decrease the gap between the rich and the poor? I think not.

"Workers' feedback on the increase to the minimum wage is commonly laughed at.

"They feel they are walking around with a dollar sign on their heads, where in a lot of cases the only one to benefit from this increase is the employer and their profits."

Last week the Living Wage movement revised its estimate of a basic necessary wage upwards to $19.25 per hour.

Mr Tabuteau called himself a "big supporter" of the movement, but stressed the importance of mass take-up by businesses for it to be effective.