Labour is planning to lift the minimum wage from $14.25 to $16 an hour in its first year in government – and that’s just the start.
Unions have been lobbying Labour on the issue, but the pressure is still on; they want much more.
Labour leader David Cunliffe is comfortably nestled between Labour’s union affiliates.
“Colleagues, comrades – we are part of a broad labour movement,” says Mr Cunliffe.
The unions are strong within that movement. They are pushing hard for a jump in the minimum wage.
Labour has already indicated two increases in its first year – one before Christmas from $14.25 to $15 an hour, and today came the details of the second.
“Even that’s starting to look a bit stingy, so we’re looking at a further increase within the first year,” says Labour’s labour spokesperson Andrew Little. “I expect it will be up around $16 an hour.”
So $16 an hour by April next year – for the unions leaning on Labour, it’s a pay-off, but just a start.
A pay-off for unions but extra costs for employers, price increases for customers and less job security for workers.
“It needs to be more, above $18, but it certainly would be a big boost,” says president of the Auckland Service and Food Workers Union (SFWU) Jill Ovens.
“I think the second increase needs to be more than $16; it needs to start moving to two-thirds of the average wage over the term of the Government,” says CTU president Helen Kelly. . .
New Zealand does have a problem with low wages.
But if pay increases are to be sustainable without boosting inflation and threatening jobs and the businesses which supply them, they have to be linked to productivity increases and the ability to pay them.
Add other Labour policies which will reduce flexibility and increase regulation and businesses and the jobs which rely on them will be even less secure.
Unions which regard a $16 minimum wage as just a start could find it is also the end to some jobs and some businesses.