Barry Soper: Minimum wage rise relatively respectable

Ordering a glass of wine at a restaurant around the corner from my home in Auckland had me reflecting on what it must be like to be on the minimum wage.

The glass, a Church Road Grand Reserve, at $22, was at the top of the range but would have taken someone on the minimum wage an hour and a half's work to buy, and that's before tax.

The minimum wage has just been raised by more than most observers were expecting, given that our inflation rate is close to flat lining. A rise of 50 cents an hour to $15.25 is a pay rise of 3.3 per cent, which given the dodgy economic climate, is relatively respectable.

But tell that to someone on it with a couple of kids and paying rent in our biggest city, because most of them won't be paying a mortgage, and they'll laugh all the way to the welfare office.

The few who do have a mortgage will take cold comfort from this country's banks, owned by the Australians, making a combined profit of more than $5 billion dollars last year, a 7 per cent increase on the year before and much of it sucked from the pockets of home owners.

And they look at the ANZ boss in this country earning in just one week more than they earn in two years.

They're the facts and on the face of them they look, to quote Labour's Andrew Little, like we're creating a generation of working poor.

Talk to John Key on the other hand and he'll tell you those who are on the minimum wage qualify for a plethora of Government handouts through the likes of "working for families" and rent subsidies. Key says if the parallel Living Wage was applied across the board, that some employers have signed up to which has just been increased to $19.80, it would cost between 30 and 35,000 jobs.

Of course there's no real way of checking that but it's a fear that workers are loathe to put to the test.

The other justification for maintaining our low wage economy is that we're better off when it comes to spending power than a number of like countries, those who belong to the OECD club. We're seventh in the value for money line up of the 21 countries, behind the likes of Australia and the United Kingdom, but ahead of the United States and Japan.

It's always a fine balancing act, Key laments, and on that he's right, in more ways than one.

Barry Soper is Newstalk ZB's political editor.

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