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The Minimum Wage & the Living Wage

The current minimum wage in NZ is $16.50 per hour for the majority of people employed over the age of 16.  The other two rates legislated by the Government are the Starting Out and Adult Training rates which are set at 80% of the minimum wage.  The minimum wage is set to increase on the 1st April 2019 to $17.70 per hour.  This large increase is part of the Coalition Government’s goal to raise the minimum wage to $20 by 2021.

The reality for some small businesses is that they won’t be able to absorb this additional cost or to pass it on to their customers.  This would lead us to think that there is the potential for employees to lay staff off.  It is interesting though that the last Labour Government under Helen Clark increased the minimum wage from $7.55 to $12 (59%) and the National Party increased it from $12 to $15.75 (31%) but unemployment fell under both Governments, apart from the temporary increase during the Global Financial Crisis.

The other wage calculation that needs to be considered is the Living Wage – this is calculated independently by the New Zealand Family Centre Social Policy Unit annually.  The current Living Wage has been calculated at $20.55 per hour – this is the hourly wage a worker needs to pay for the necessities of life and participate as an active citizen of the community.  It allows people to be able to cover the basic expenses like food, transportation, housing and childcare.

There is a Living Wage movement where employers can become accredited and help to spread the word about helping to empower our people to live as they should be able to.  There are a lot of public enterprises like City Councils paying the Living Wage to their employees but there are also a number of private enterprises coming on board.

These employers recognise that staff are their most valuable asset and the stories they share indicate that they are attracting good people.  The Living Wage makes the staff feel valued and they are more engaged and focused at work rather than worrying about how they are going to pay the rent this week.  With wages normally being a major expense for any business it can be a big ask for employers to do this but they need to look at the potential benefits of more productive staff as well as the intangible benefits of contributing to a more valuable workforce.  If our lowest wage earners are given a boost there will be flow on effects in the communities in which they live in both an economic and well being sense.

Business Like NZ Limited is a proud Kiwi business who believes that our staff are our most valuable asset and accordingly supports the living wage movement.

For more information on the Minimum Wage check out https://www.employment.govt.nz/hours-and-wages/pay/minimum-wage/minimum-wage-rates/

For more information on the Living Wage check out https://www.livingwage.org.nz/

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Article by Rachel Lamb