Minimum Wage increases

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FineWine

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Topic # 243595 19-Dec-2018 20:01

Government announced today an increase in the minium wage in 2019 with yearly increases till 2021.

Source Scoop Media

The scheduled increase are:
April 1, 2018 $15.75 to $16.50 = $0.75 is a 4.8% increase.
April 1, 2019 $16.50 to $17.70 = $1.20 is a 7.3% increase.
April 1, 2020 $17.70 to $18.90 = $1.20 is a 6.8% increase.
April 1, 2021 $18.90 to $20.00 = $1.10 is a 5.8% increase.
Overall change $15.75 to $20 is a 27% increase.

Still not a living wage though.

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Reply # 2148069 19-Dec-2018 20:08

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This is awesome, shame on "National Party leader Simon Bridges said the increase was "too far, too fast", and small businesses would feel the pinch and possibly pass the extra costs to consumers."

If we get better wages, I am sure we can cover the minimal extra rise in costs

ockel

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Reply # 2148070 19-Dec-2018 20:11

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Sadly the fantastic wage increase to hospital workers now looks paltry. The union has only managed to get barely better than minimum wage increases.

At least those with training get much more of a pay increase. I know that I wont be expecting 27% over the next 3 years - I'll be expecting north of 40%.

https://www.newshub.co.nz/home/money/2018/11/hospital-service-workers-get-massive-pay-boost.html

chevrolux

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Reply # 2148087 19-Dec-2018 20:49

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Yep that whole thing of "small businesses will suffer" annoys me. The increase from now to the $20 is what, an extra $170pw per person? If you can't afford that in the business you have bigger issues. Revenue would fluctuate far more than that week to week.
And dont tell me "but I have 20 staff!"... well you would obviously have the revenue to cover that level of staffing so same comment applies.

What I do think though is we need apprentice wages of some description (maybe we do? I'm unsure). I wouldn't expect a builder to take a kid straight of high school and pay them $20/hour.

attewell

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Reply # 2148089 19-Dec-2018 20:59

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chevrolux: Yep that whole thing of "small businesses will suffer" annoys me. The increase from now to the $20 is what, an extra $170pw per person? If you can't afford that in the business you have bigger issues. Revenue would fluctuate far more than that week to week.
And dont tell me "but I have 20 staff!"... well you would obviously have the revenue to cover that level of staffing so same comment applies.

What I do think though is we need apprentice wages of some description (maybe we do? I'm unsure). I wouldn't expect a builder to take a kid straight of high school and pay them $20/hour.

"a rising tide lifts all boats"..

I also think we should reinstate mandatory T1.5 overtime when wages below say $30, as I think those on lower wages, are less likely to have in overtime.

Aredwood

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Reply # 2148134 20-Dec-2018 02:02

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Unfortunately I have to agree with the National party on this issue. Just because a company has a large turnover, doesn't mean that it also has a large profit margin.

For example, the Masport foundry in Mt Wallington, Auckland has gone bankrupt. All of the staff there who have just gone on annual leave, now have no jobs to come back to next year. And construction companies are constantly going bankrupt also. Despite a building boom.

There are going to be a lot of other manufacturers closing down or moving overseas soon. For example, you can buy NZ made hot water cylinders, Control valves to go with the cylinder. Water and drain pipes, matching fittings. Tapware and things like kitchen and bathroom cabinets. All made in NZ. Overseas made examples of all of the above are already available in NZ as well.

Let's face it though. Virtually no one is going to pay extra just because something is NZ made. So there are going to be far more job losses. I have never had a customer ask me (as a plumber), to use NZ made materials where possible. But countless people who want the job done as cheap as possible.

This will also allow the government to cut back on social welfare spending by stealth, rake in more payments for things like student loans etc. As lots of forms of government assistance are linked to income. Which also has the side effect of hurting the People who need help the most. While those who don't get any government assistance now, will get the biggest increase in their disposable income.

It will also mean that you will need to have lots of qualifications and experience just to get a job that will pay only $10 or so more per hour than the min wage.

In short, the min wage rate is already really high. The real problem is that living expenses are way too high. Compare someone who earns min wage, while having to pay accommodation expenses to live and / or work in central Auckland. Vs someone who is also on min wage and working the same hours. Who lives in a tiny town in the middle of nowhere.

Unfortunately it all comes back to things like high land prices and excessive regulations. Which in turn come back to things like the Resource Management Act. As no country that I know of, has gotten rich just by trying to train the whole population to university level. And importing as much as it can in goods and services.

Edit to add.

That $170 per week figure doesn't include the extra money that an employer will also have to pay in ACC fees, Kiwisaver contributions, and holiday pay + sick leave.

nakedmolerat

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Reply # 2148135 20-Dec-2018 03:42

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Aredwood: Unfortunately I have to agree with the National party on this issue. Just because a company has a large turnover, doesn't mean that it also has a large profit margin.

For example, the Masport foundry in Mt Wallington, Auckland has gone bankrupt. All of the staff there who have just gone on annual leave, now have no jobs to come back to next year. And construction companies are constantly going bankrupt also. Despite a building boom.

There are going to be a lot of other manufacturers closing down or moving overseas soon. For example, you can buy NZ made hot water cylinders, Control valves to go with the cylinder. Water and drain pipes, matching fittings. Tapware and things like kitchen and bathroom cabinets. All made in NZ. Overseas made examples of all of the above are already available in NZ as well.

Let's face it though. Virtually no one is going to pay extra just because something is NZ made. So there are going to be far more job losses. I have never had a customer ask me (as a plumber), to use NZ made materials where possible. But countless people who want the job done as cheap as possible.

This will also allow the government to cut back on social welfare spending by stealth, rake in more payments for things like student loans etc. As lots of forms of government assistance are linked to income. Which also has the side effect of hurting the People who need help the most. While those who don't get any government assistance now, will get the biggest increase in their disposable income.

It will also mean that you will need to have lots of qualifications and experience just to get a job that will pay only $10 or so more per hour than the min wage.

In short, the min wage rate is already really high. The real problem is that living expenses are way too high. Compare someone who earns min wage, while having to pay accommodation expenses to live and / or work in central Auckland. Vs someone who is also on min wage and working the same hours. Who lives in a tiny town in the middle of nowhere.

Unfortunately it all comes back to things like high land prices and excessive regulations. Which in turn come back to things like the Resource Management Act. As no country that I know of, has gotten rich just by trying to train the whole population to university level. And importing as much as it can in goods and services.

Edit to add.

That $170 per week figure doesn't include the extra money that an employer will also have to pay in ACC fees, Kiwisaver contributions, and holiday pay + sick leave.

Masport foundry did not go bankrupt because of the minimum wage increase.

Again, Fletcher and building companies that go belly up has got nothing to do with Minimum Wage increase. In fact those new builder apprentices that works at Fletcher were paid well over $20/hr.

If you are suggesting that this is somehow unfair because this will close the gap for those with extra experience or qualifications, based on your example of $10 extra equals to $400/week or $20k per year, that's still a lot of money.

Dulouz

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Reply # 2148137 20-Dec-2018 05:27

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These increases will do buggar all. Businesses will put their prices up and said minimum wage person will be no better off at all. If you think the wages you earn aren't enough, make yourself more valuable and you can command higher value from the market.

Amanon

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Reply # 2148139 20-Dec-2018 06:42

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The cost of living is too high, a wage increase for low income workers won’t fix that, it never does.

MikeB4

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Reply # 2148140 20-Dec-2018 06:51

Dulouz:
These increases will do buggar all. Businesses will put their prices up and said minimum wage person will be no better off at all. If you think the wages you earn aren't enough, make yourself more valuable and you can command higher value from the market.

Of course everyone is capable of that.

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sbiddle

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Reply # 2148143 20-Dec-2018 07:04

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Whether minimum wage increases drive inflation is one of the biggest debates in the economics world and one which doesn't have a simple answer. There is plenty of evidence however to suggest that large increases in the minimum wage such as the one NZ is looking at will cause inflationary pressures, simply because all wages need to go up as a result.

tdgeek

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Reply # 2148144 20-Dec-2018 07:09

Where does this $170 pw come from?

Its $48 pw before tax

chevrolux

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Reply # 2148145 20-Dec-2018 07:14

tdgeek:
Where does this $170 pw come from?

Its $48 pw before tax

I just did the difference between the current wage and the end goal of $20/hour. Was $4-something.

But yea, this initial rise is MUCH less.

tdgeek

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Reply # 2148147 20-Dec-2018 07:31

chevrolux:
tdgeek:

Where does this $170 pw come from?

Its $48 pw before tax

I just did the difference between the current wage and the end goal of $20/hour. Was $4-something.

But yea, this initial rise is MUCH less.

Got it, tks

Aredwood

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Reply # 2148632 21-Dec-2018 01:06

nakedmolerat:

Masport foundry did not go bankrupt because of the minimum wage increase.

Again, Fletcher and building companies that go belly up has got nothing to do with Minimum Wage increase. In fact those new builder apprentices that works at Fletcher were paid well over $20/hr.

If you are suggesting that this is somehow unfair because this will close the gap for those with extra experience or qualifications, based on your example of $10 extra equals to $400/week or $20k per year, that's still a lot of money.

I was replying to the previous comments that companies can always afford to pay higher wages. Yet there are lots of sectors where profit margins are already really low. And the money to fund wage increases has to come from somewhere. As companies can't keep on reducing profit margins and expenses forever. At some point, either prices have to rise or the company goes bankrupt.

As for wages for people with more qualifications/ experience. Of course you should get a decent amount extra. Wages for professions such as nursing are way too low compared to jobs such as stacking shelves at the supermarket.

Back when I entered the job market as a teenager in the early 2000s. You could easily get more than the min wage, as long as you have a good work ethic. Even with no qualifications and very little work experience.

For example, I found myself without a job, so I signed up at a local Labour hire company to get some income as a stop gap measure. Within a month, I was invited to an interview with one of the host employers who I had worked for. Wage offered was over double the min wage at the time. Yet that offered wage was still very low compared to what nurses, teachers, Police officers etc got.

Nowdays, even having a degree is no guarantee that you can get a job that pays more than min wage.

tdgeek

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Reply # 2148662 21-Dec-2018 07:29

I dont buy the issue with small businesses. If costs increase, so do prices, that happens all the time. The % these people will get is high, but its still $1-20 per hour. Businesses face more cost variations with fuel, and the exchange rate effect than $1-20 per hour. And annual CPI 2% increases for other staff on higher rates. If a business is that marginal, then other cost increases and lower than expected sales would surely hurt more. If we want a low wage economy then perhaps the Govt needs to implement a price freeze so that the low wage economy is matched by a low price increase economy. But that would create anger

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