The announcement, which is usually made in February, came before Christmas to, said van Velden, give employers more advance notice of the wage increase than they’d had in the past.
The reaction to the news was mixed, to say the least.
The 1.5% increase is, by van Velden’s own admission, a “modest” one. So modest people are unlikely to notice it, considering it is on the lower end of the Reserve Bank’s inflation target. It is the smallest, in dollar terms, since 2013, and the smallest percentage increase since the 1990s.
New Zealand Council of Trade Unions (NZCTU) acting president Rachel Mackintosh said the wage increase is “a wage cut in real terms for tens of thousands of people on the minimum wage”.
She told the Herald the increase was miserly and indicated the governing coalition was not looking out for working people.
“It’s unfair and unequal.”
NZCTU policy director Craig Renney told RNZ it was “barely an increase”.
“We’ve calculated that a fulltime minimum wage worker will be $235 a year worse off in real terms. This is the second year in a row that we’ve had a below-inflation increase. In real terms, over the two decisions of Brooke van Velden, workers will be $1206 a year worse off.”
Teanau Tuiono, Green Party MP and workplace relations and safety spokesman, said the 1.5% increase would not be in line with inflation.
“If you’re a worker and you’re renting and rents are going up 4.1% from November last year to November this year, it’s not keeping up.”
According to the Green Party, this wage increase will not deter anyone from moving to Australia in search of a better life.
“We’re seeing people upping sticks and heading over to Australia. This Government isn’t serious at all. They’re dreaming, mate,” Tuiono said.
Not everyone agrees. In fact, the Employers and Manufacturers Association (EMA) said it was a realistic increase.
“It suits the times really. For a while there it was going up in quite large increments,” said EMA head of advocacy Alan McDonald.
The Stats NZ consumers price index was up 2.2% in the September quarter compared to a year earlier.
Labour Party workplace relations spokeswoman Camilla Belich pointed out that wage increases alone are not enough.
“This Government dished out $2.9 billion to landlords and $216 million to tobacco companies this year, but have only found 35c for a minimum wage worker,” she said in a statement.
“The groceries and other goods they’re purchasing rise with inflation, so the money is worth less. The Government has announced an effective wage cut, right before Christmas,” she added.
A minimum wage increase, at face value, is always good news for workers and the early announcement has been welcomed by businesses, as the extra notice will help their budgeting. But unless the Government provides strong, direct measures to lower the cost of living, this increase is not really going to add money to anyone’s pockets.
