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Minimum wage change hurts employees

Minimum wage change hurts employees

Today's announced 6.25% increase in the minimum wage, on top of similar increases in past years*, will end up harming employees, says Business NZ.

Executive Director Anne Knowles says increasing the pay rate for unskilled people reduces their incentive to get training and up-skill themselves.

"Regular increases in the minimum wage send the message that it's OK to be unskilled - the Government will look after you.

"But it's employers that have to pay the increases, not the Government. Employers either have to somehow find the money to pay for the higher rates - or downsize operations and jobs if they can't.

"Research studies show every increase in the minimum wage is accompanied by a drop in employment.

"The situation is compounded for young people - they are the most likely to be unskilled and their unemployment rate is three times that of adults. By also increasing the youth minimum rate, the Government has today reduced both job opportunities and incentives to train," Ms Knowles said.

*Recent Minimum Wage Increases: Youth Adult Mar 00 $4.55 $7.55 Mar 01 $5.40 $7.70 Mar 02 $6.40 $8.00 Mar 03 $6.80 $8.50

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