Minimum wage to $21.20
My blog post lamenting the minimum wage announcement was two months overdue seems to have done the trick, and the Government announced on Thursday it will move to $21.20 on 1 April.
Stuff reports:
Employers and Manufacturers Association (EMA) chief executive Brett O’Riley said the Government seemed intent on increasing the minimum wage to match the living wage by the next election.
But he said the announcement was a “kick in the guts” for many businesses, and ironic given that this week business groups had been discussing with Treasury what extra support there might be available for sectors struggling in the red setting.
“Many businesses are already on their knees, facing the impact of Covid, including disrupted global supply chains, inability to find skilled workers, rampant inflation… now they’re going to stoke the fire with this 6 per cent increase.”
He said his organisation believed the increase was likely to shut people out of work rather than result in more people earning more. “The callousness of this to small businesses beggars belief. This is just another body blow, a slap in the face. We know that businesses are already on their knees, is this designed to flatten them?”
This move will add fuel in the inflationary fire we already have. And we already had one of the highest minimum wages in the world. In 2020, the ratio of the minimum wage to the medium wage was:
- NZ 65%
- France 61%
- UK 58%
- Australia 53%
- Germany 51%
- Canada 49%
- US 29%
Politicians should be focused on lifting the median wage for everyone, which you do through productivity gains – not legislation. The minimum wage should be set in statute as a percentage of the median wage so the focus will go on productivity.