Mayors back $12 minimum wage

New Zealand's mayors want the Government to raise the minimum wage to $12 an hour sooner than it plans so as to help young people into skilled trades.

The Mayors Taskforce for Jobs, representing 91 per cent of mayors, says lifting the legal minimum from $9.50 an hour to $12 would encourage "greater investment in skill training leading to increases in productivity".

In a submission to the new Minister of Labour, Ruth Dyson, they say minimum wage increases of 36 per cent for adults, 81 per cent for 16- and 17-year-olds and 126 per cent for 18- and 19-year olds since 1999 "have not resulted in constraints on job creation or fewer opportunities for young people".

But three of the 10 groups that have made submissions on this month's annual minimum wage review - Business New Zealand, Federated Farmers and the supermarket industry - are urging Ms Dyson not to increase the minimum wage at all.

A fourth group, the Retailers Association, supports "a modest increase" in the adult rate in line with other recent wage increases, but opposes any further increase in the youth rate for 16- and 17-year-olds, currently $7.60 an hour.

The Government agreed with New Zealand First and the Greens after the election to raise the adult rate to $12 by the end of 2008 "if economic conditions permit".

The Retailers Association says such a big increase would cost its members $760 million a year by 2009, assuming that shopkeepers would have to pass on the full $2.50 an hour increase to all their workers to maintain relativities with those now on $9.50.

"The majority of our members are affected by the minimum wage, either because they employ junior staff at weekends and after school, or they employ extra staff during the busy Christmas and Easter periods," the association says.

"Such an increase in wage rates will have a severely detrimental impact on operating costs for this sector, which ultimately has flow-on effects to the wider society - consumers in terms of increased prices, employees in limitations of opportunities particularly for part-time and student workers, and unnecessary economic impacts with additional inflationary pressure."

It said the average wages paid to entry-level shop assistants in February were $10.56 an hour for those aged 18 and over and $8.56 for 16- and 17-year-olds.

In contrast, the national average wage for the whole economy in September was $21.13 an hour.

The National Association of Retail Grocers and Supermarkets says its stores give many youngsters their first jobs. But such openings could be lost if the minimum wage were to be increased.

The association says higher minimum wages may cause supermarket owners to take 20-year-olds in preference to 18- and 19-year-olds because of their greater maturity and better work ethic.