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Increase In Minimum Wage Will Deny More New Zealanders Work

Increase In Minimum Wage Will Deny More New Zealanders The Dignity Of Work
Press Release by ACT Leader John Banks
Tuesday, February 26 2013

National’s decision to increase the minimum wage will see more business failures and more jobs lost, ACT Leader John Banks said today.

“At a time when National should be getting out of the way of business, it’s putting greater barriers in place,” Mr Banks said.

“Small businesses make up 97% of all enterprise within New Zealand and account for 40% of our GDP. Most are struggling as they have little to no bargaining power with suppliers and do not have the capacity to absorb on-going cost increases.

“A member survey by Hospitality New Zealand last year found that 48% of hospitality owner/operators paid themselves less than the minimum wage.

“If employers can’t afford to pay themselves the minimum wage, how can they be expected to pay their employees even more?

“The minimum wage increase will impact most on those who can least afford it - low-skilled workers. It will price them out of the market, consigning them to a benefit.

“We have seen this with the abolition of the youth minimum wage: Statistics New Zealand released its December quarterly report which put the youth unemployment rate at 30.9 per cent - the highest rate for at least 30 years.

“Of course we would all like to see employees earn higher wages. But arbitrarily raising the minimum wage via regulation rather than through an increase in productivity will only result in job losses,” Mr Banks said.


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