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With A Bigger Economy NZ Can Have Higher Wages

20 October 2005

With a bigger economy, New Zealand will be able to afford a $12 minimum wage by 2008….

Michael Barnett, Auckland Chamber of Commerce CEO said that under today’s economic conditions many employers will have a lot of difficulty staying competitive if they were forced to provide a minimum wage of $12 an hour.

“I am advised that in some businesses like supermarkets and call centres that operate for long hours and employ high numbers of staff, lifting the minimum wage from the current level of $9.50 to $12 will add move than $10 million a year to the wage bill.”

“But I also note that the minimum wage in Australia is already at A$12.30 ($13.50) and it’s about the same in Britain.”

If we are going to get competitive with Australia and other like economies, the question we should be asking is: “What urgent steps are we going to take to grow the size of the economy and improve productivity so that we can afford to pay competitive wages?”

Instead of being afraid of having a high wage economy, including minimum rates that are competitive with like countries, our challenge in the period ahead is to come up with formulae to grow the economy, boost earnings from exports and be able to afford to pay wages that help lift living standards of everyone.


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