Balancing act in minimum wage change

Media release
27 January 2010

Balancing act in minimum wage change

The current environment makes adjusting the minimum wage a difficult balancing act and today’s increase of 25 cents is probably reasonable in the circumstances, says Business NZ.

Business NZ Chief Executive Phil O’Reilly says given the Government’s policy of continuing to increase the minimum wage, there are three main factors to consider.

“First there is the issue of what businesses can bear - too high an increase could be a break-point for those already struggling with slim margins and low demand.

“Then there is the comparative fact that thousands of other workers have not had any wage increase at all and may not get one in the foreseeable future.

“Thirdly, the Government will want to ensure a level of protection for people with low or no skills and would not want them missing out on employment because the minimum wage was set too high.

“At a time of continuing unemployment, with a minimum wage increase similar to the rate of inflation, the Government’s decision is reasonably balanced.”

ENDS

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