Why minimum wage rises matter

  • Opinion
  • April 20, 2018
  • Rachel Helyer Donaldson
Why minimum wage rises matter

After writing a feature for NZ Retail magazine on recent and upcoming changes to employment law, freelance writer Rachel Helyer Donaldson was struck by the ideological distance between the retailers and retail staff she spoke with. 

It’s no secret that retail looks set to get a massive shake-up under the new Labour-led Government’s employment law overhaul, and this will affect both retailers and their staff.

Whether these changes are positive or negative so often depends on who you are. Writing a feature for the April/May issue of NZ Retail on the forthcoming law changes, I was struck by the chasm between many business owners and workers when talking about pay and work conditions.

We hear a lot about how pessimistic retailers are, in the wake of the minimum wage rise, to $16.50 on April 1, and the incremental moves towards $20 by 2021.

Everyone from Mojo Coffee to my local cattery is putting up their prices in response to the wage rise, and plenty of retailers are set to follow suit too.

Margins can be tight, particularly for SMEs. Yet retailers face all sorts of escalating costs – inventory, store fixtures, utilities, insurance, advertising, rent, and so on - that can affect prices, but these usually occur without the same scare-mongering that is reserved for a minimum wage increase.

New Zealand Herald journalist Brian Rudman points out that in 2016, chief executives’ pay rises averaged $56,000 - considerably more than the annual pay of their staff on the minimum wage.

But when the minimum wage goes up, instead of acknowledging how it could help people on it, many blame the Government and the lowest of the low-paid for threatening the economy and making the punters pay.

There are exceptions, retailers who pay their staff a living wage ($20.55) without needing the stick of legislation, such as Wellington fashion boutique Harry’s and cycle shop Bicycle Junction, and Auckland’s Eightthirty Coffee Roasters.

These companies value the workers who sell their products, and have inserted the living wage into their business model accordingly.

While many retailers bemoan the minimum wage rise, it will make a difference to those who receive it. It’s still not a huge amount, and nor is even a living wage, but at least that allows you to afford basic expenses to get by as well as participate in society. New Zealand is an expensive place to live, even for those on significantly higher salaries, and earning a wage that pays you enough to live on and house, clothe and feed your family needs to be a basic right.

Talk to retail workers, and you get a picture of the other side. They talk about just getting by, if they’re lucky, and the difficulty of getting enough hours to make a liveable income even when their pay rates are relatively reasonable. One retail employee told me that while her favourite part of her job is helping customers, what she doesn’t like is feeling “expendable”.

Being valued and respected – having a living wage, having hours you can rely on and feeling listened to - can go a long way to improving workers’ lives. No worker should have to subsist simply to subsidise someone else’s business.

The Government hopes to tip the balance back to better protect vulnerable workers, while creating a high-performing economy that delivers good jobs, decent work conditions and fair wages for all. Let’s hope it can straddle the chasm and maybe even find some common ground.

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