The Council of Trade Unions is calling on the Government to raise the minimum wage to the level of the living wage, saying some essential workers are living on a pay packet that is unsustainable.
In a press release today, the union said essential workers “deserve a pay rise for their work during the Covid-19 pandemic”.
Currently the minimum wage is set at $20.00 per hour.
The living wage rate is $22.75 an hour.
“Our essential workers are heroes who worked so hard to get us through the pandemic, and far too many of them did it on a wages that they can’t sustain a family on. Now’s the time to reward our essential workers and those on the front lines with a well deserved pay rise," says Richard Wagstaff, President of the CTU.
“A pay rise for essential workers will also be good for our economy and our communities. When essential workers get a pay rise, they will spend it in their community, supporting local businesses, getting the car repaired, taking the kids out for dinner.
“It will be a shot in the arm for local communities right around the country as we recover from Covid-19 and the Delta outbreak.
“The Living Wage rate of $22.75 an hour has been calculated by researchers to be the level at which workers can afford the basic necessities of life and participate in their community. For essential workers who have seen more and more of their wage bill eaten up by housing and other rising costs, this will be a well deserved boost," Wagstaff says.
“We’ve seen throughout the Covid-19 pandemic the ways that poverty and inequality make our society more vulnerable to external shocks. The Government can strengthen our communities while rewarding the people who worked so hard to keep us all safe and healthy over the last few years.
“Research by economists at MOTU shows we can afford to do this – that a minimum wage of $22.75 won’t push up unemployment, just as the recent raises over the last few years haven’t. Corporations have benefitted from the strong economic bounce back – corporate profits are up 17 per cent this year. That means there’s more than enough money to reward our essential workers.
“The Government can and should act now to make this happen,” says Wagstaff.
Fishhooks in living wage proposal - BusinessNZ
Business NZ chief executive, Kirk Hope disagrees with CTU's call, saying a 14 per cent wage rise could cripple small businesses.
"Small businesses have born the brunt over lockdown and It would be pretty hard on a lot of those business to accommodate that sort of wage rise," Hope told 1News.
He says there would be fishhooks in changing the minimum wage rate, as called for by the CTU.
"The CTU proposal calls for the higher pay rate for essential workers for their work during the Covid-19 pandemic. "
However, Hope says minimum wages "don’t just apply to essential workers, and the CTU’s proposal is untenable because a massive wage increase of 14 per cent is simply not viable, at a time when many small business owners are struggling to survive and would not even be paying themselves the minimum wage".
The proposal would push up costs further and further boost inflation, BusinessNZ said.