Category: Wages

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Minimum wage ‘increase’ is an effective cut

Source: Council of Trade Unions – CTU

The NZCTU Te Kauae Kaimahi are saying that the Government should do the right thing and deliver minimum wage increases that don’t see workers fall further behind, in response to today’s announcement that the minimum wage will only be increased by 1.5%, well short of forecast inflation.

“With inflation forecast at 2% by the Reserve Bank, the new minimum wage rate is an effective cut in real terms and will leave workers worse off. This is the second year in a row where this Government has made the decision to cut the Minimum wage in real terms,” said NZCTU Acting President Rachel Mackintosh.

“National promised to support New Zealanders through the cost-of-living crisis, and yet this decision will mean that the lowest income workers fall even further behind. Minimum wage Workers are now $1,206 a year worse off as a consequence of these real term wage cuts”.

“Government has a responsibility to ensure that all workers have enough to afford rent, pay the bills, put good food on the table, and buy their kids what they need. How are workers meant to keep up with rising food and rent costs when the Government is cutting their wages in real terms?

“At a time when inflation is coming down, this was an opportunity for the Government to give workers a break and ensure they get real terms pay increases.

“All New Zealand workers have the right to a liveable income to support their families – they deserve to be paid a Living Wage,” said Mackintosh.

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Government must deliver increases to minimum wage that keep up with inflation

Source: Council of Trade Unions – CTU

NZCTU President Richard Wagstaff is calling on the Government to deliver minimum wage increases that keep up with rising costs, in response to new inflation data released by Stats NZ today.

The new data shows that food and housing prices have risen by far more than the minimum wage will. Food price inflation was at 4% for the year to January 2024, while rental price inflation was at 4.5%. This contrasts with the decision to only increase the minimum wage by 2%.

“This new data confirms that the Government’s decision to only adjust the minimum wage by 2% is in fact a cut in real terms, and this will put further pressure on the ability of families to get by during the cost-of-living crisis,” said Wagstaff.

“Wages not keeping up with inflation has a significant impact on workers having enough to afford rent, pay the bills, put good food on the table, and buy their kids what they need.

“All New Zealanders benefit from minimum wage increases because they drive up wages, local economies prosper, and our communities are safer and healthier.

“The NZCTU has launched a petition calling on the Prime Minister and the Minister of Workplace Relations to do the right thing and deliver minimum wage increases that don’t see New Zealand workers fall further behind.

“The minimum wage should equal the Living Wage, but at the very least, the Government must deliver annual increases to the minimum wage that lift low-paid workers’ incomes in real terms,” said Wagstaff.

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90-day trials – didn’t work then, won’t work now

Source: Council of Trade Unions – CTU

Unions across the country have slammed the National Party’s proposal to reintroduce 90-day trials, and say it would undermine fundamental workplace rights in New Zealand.

NZ Council of Trade Unions President Richard Wagstaff said 90-day trials were outdated, ineffective, and lazy policy.

“Getting ‘back on track’ as National puts it, clearly means a return to policies that are bad for working people.

“90-day trials are not a mechanism to make hiring workers easier. They only make it easier for businesses to fire them.” 

Trial periods have proven to be ineffective. Treasury funded research found no evidence that the ability to use trial periods significantly increased firms’ overall hiring.

Additionally, there was no evidence that the policy substantially increased short-term hiring.

The study did find that many employees faced increased uncertainty about their job security in the months after their hiring.

Unite National Secretary John Crocker said the policy would disproportionately impact workers that were young and on low incomes.

“This policy would disadvantage vulnerable workers, like young people or those just entering the workforce, while allowing bad employers to fire people with impunity.

“Workers can already be fired – but it has to be done fairly and reasonably. National’s proposal is to protect unfair and unreasonable employers from any consequences.”

E tū Director Sarah Thompson dismissed the policy as anti-evidence and anti-worker.

“During a cost-of-living crisis, workers and our families need better pay, conditions, and job security – things National seems dead set on eroding through talk of 90-day trials, and the repeal of Fair Pay Agreements.”

“This is a failed policy from the past that exists solely to seduce the National Party’s business donors,” said Dennis Maga, FIRST Union General Secretary. “This would make life worse in New Zealand for anyone who doesn’t already run a very large and exploitative business.”