Battle for a living wage: Govt favours raising minimum wage, says minister

Simon Bridges. Photo / Supplied

The Government is not buying into the idea of a "living wage" but the new Minister of Labour says the minimum wage will continue to increase.

Newly elevated Tauranga MP Simon Bridges said he didn't want to sound "like a typical politician" who hadn't had any advice on the idea of a living wage, but his tentative view was the idea was overly subjective and simplistic and wouldn't be a priority for the Government.

"The reason I use the term subjective is I think there are a wide variety of circumstances that people live in, so it's not necessarily easy to say this is the wage that everyone should get.

"We do have a minimum wage and I've made it reasonably clear that we really want to lift it as we can to protect the real incomes of low-waged people, so to some extent that is a proxy for a living wage -it's roughly $540 a week at the moment, which is roughly double unemployment benefit rates."

Tomorrow, the union movement will announce the hourly rate it believes to be a "living wage" - set to be around $18 to $20 an hour.

Forty per cent of the country's 1.85 million employees, around 740,000 people, will earn below that rate including beginning teachers, chefs, truck drivers, mechanics and carpenters, as well as traditionally low-paid groups such as cleaners, caregivers and checkout operators.

A Cabinet decision on any increase to the $13.50 an hour minimum wage is due soon and will apply from April 1. Mr Bridges said $13.50 an hour was a sufficient protection for low-waged people, citing it as one of the highest in the OECD.

"We have, as a government, increased it every single year we've been in office - our approach is very much to keep increasing the minimum wage over time to protect the real incomes of low-paid workers, while minimising job losses."

Although Mr Bridges has initially rejected the idea of a living wage, he says the Government isn't in denial over the struggle some Kiwis face.

"I believe we're doing a lot for workers who can't make ends meet - I don't think it's well enough understood that if you're a low-income worker there are a range of entitlements you are able to get through Work and Income in terms of accommodation supplement, emergency benefits and various health and other packages."

He would not be drawn on the cleaners at Parliament who earn $13.85 an hour.

Asked whether they should earn more, he said: "I understand the position they and their union would take, but actually we're trying to raise the minimum wage as we can and as the economy can take it. We also provide a range of entitlements to low- income Kiwis who are doing their best working in low-paid jobs and we, as a country, need to be conducive and open to investment and do the things that make us productive so that there are higher wages."

Rising floor

Minimum wage rates

National
1997 $7.00
1998 $7.00
1999 $7.00

Labour
2000 $7.55
2001 $7.70
2002 $8.00
2003 $8.50
2004 $9.00
2005 $9.50
2006 $10.25
2007 $11.25
2008 $12.00

National
2009 $12.50
2010 $12.75
2011 $13.00
2012 $13.50.