Minimum wage rise to 'hit Polynesians'

Many Maori and Pacific Island people could be squeezed out of the labour market with a rise in the minimum wage, says Gail Pacheco from the Auckland University of Technology.

Maori and Pacific Islanders, who account for more than a fifth of minimum and sub-minimum wage workers, would "attract more negative impact if the wage rise drives employers to reassess their options", she said.

In her thesis, Minimum wages in New Zealand: An empirical inquiry, Ms Pacheco found that a rise in the minimum wage meant unskilled and young workers, especially between ages 16-19, could be displaced.

"Given the option, employers might switch to hiring people with more skills and education or older people with more experience.

"My study found for Maori who find the minimum wage binding, a 10 per cent rise in the real minimum wage would see a 15.8 per cent point fall in employment propensity, a drop of 13.5 hours usually worked each week, a 5.7 per cent point increase in unemployment propensity and a 10.9 per cent point increase in inactivity, that is, not working or studying."

The minimum wage is "a blunt instrument" and there needs to be a more balanced debate around increasing it, she said.

The minimum wage increased from $9.50 to $10.25 per hour in March.

Green MP Sue Bradford's Minimum Wage (Abolition of Age Discrimination) Amendment Bill, which would change the law so 16 and 17-year-olds are paid the same as older people, is now before Parliament.

The Unite union is pushing ahead with plans to seek backpay for thousands of people who earned youth rates in the past six years after a legal opinion was interpreted as saying such discrimination was illegal.

AUT is setting up a new research centre to investigate New Zealand's "working culture". Ray Markey, Professor of Employment Relations, hopes that the Centre for Work and Labour Market Studies will become a major global research institute.

- NZPA