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Options for the minimum wage review 2010

This section sets out the options considered for this year’s review of the minimum wage rates and submitters’ views on this year’s review.

The Department has examined four options for the adult minimum wage rates in 2011. These options are:

Option 1: Retaining the current adult minimum wage of $12.75 an hour;

Option 2: An increase to $13.00 an hour in line with the change in the Consumers Price Index (CPI) in June 2010 and the changes in average wages from the Quarterly Employment Survey (QES) in June 2010;

Option 3: An increase to $13.50 an hour; and

Option 4: An increase to $15.00 an hour.

Submitters’ views on the minimum wage rate

The Minister of Labour invited written submissions from Business New Zealand, New Zealand Council of Trade Unions (NZCTU) and other stakeholders. Twelve written submissions were received. A summary of the submissions is attached as Appendix 3 to this report, and relevant submitters’ comments have been included throughout this report.

Three submitters (National Association of Retail Grocers and Supermarkets of New Zealand (NARGON), Federated Farmers of New Zealand, and Hospitality Association of New Zealand) recommended no increase to the minimum wage (Option 1).

Two submitters (National Advisory Council on the Employment of Women (NACEW), and Mayors’ Taskforce for Jobs) recommended an increase in the minimum wage, but did not recommend a specific figure.

The Small Business Advisory Group recommended a range of options from no change to $13.00 an hour, with a strong preference to increase the minimum wage rate in line with the change in the CPI (Option 2).

One submitter (Unite) recommended an increase to $15.00 an hour (Option 4).

Five submitters (NZCTU, National Distribution Union, New Zealand Nurses Organisation, Service and Food Workers Union (SFWU), and Working Women’s Resource Centre) recommended increasing the minimum wage to $17.22 an hour[12].


Footnote

12 This is based on 66.0% of the average ordinary time wage of $25.45 an hour in the June 2010 Quarterly Employment Survey, plus a 2.5% increase in line with the expected wage movement to the end of March 2011. The New Zealand Council of Trade Unions and Service and Food Workers Union also proposed an alternative option of an April 2011 increase to $15.00 and an increase to $17.22 in 2012.