Call for $22.75 minimum wage to reward essential workers

Tuesday, 16 November 2021

New Zealand’s Covid-19 “heroes” deserve to be paid a living wage, the Council of Trade Unions (CTU) says.

The council, an umbrella organisation for 30 unions, is calling on the Government to reward frontline and essential workers by increasing the minimum wage from $20 to $22.75 an hour, in line with the living wage.

“Our essential workers are heroes who worked so hard to get us through the pandemic, and far too many of them did it on a wage that they can’t sustain a family on,” CTU president Richard Wagstaff said.

Introduced in 2013 as a way to tackle growing poverty and inequality, the living wage is calculated to reflect the true cost of living in New Zealand. About 240 employers pay the living wage.

The Council of Trade Unions is calling on the Government increase the minimum wage from $20 to $22.75 an hour.

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Wagstaff said an increase in the minimum wage would be a well-deserved boost for essential workers who had seen more of their income eaten up by housing and other rising costs.

Last month the CTU warned that those on the lowest incomes would be the hardest hit by rising inflation, with many people effectively earning less as wages failed to keep up with the increasing cost of living.

Council of Trade Unions president Richard Wagstaff says essential workers deserve a wage they can sustain a family on.

Annual inflation jumped to 4.9 per cent in the September quarter, up from 3.3 per cent in the previous quarter, according to Stats NZ.

However, incomes were growing more slowly, with the latest available data putting average wage inflation at 2.1 per cent.

In a briefing paper released on Tuesday, the CTU said inflation over the past 10 years had been running nearly 40 per cent higher for those with the lowest 20 per cent of incomes, than for the those with the highest 20 per cent.

Core inflation – food, fuel, rent, rates – was running well ahead of general inflation and workers on the minimum wage faced higher cost of living increases than those on higher incomes, it said

The Covid-19 pandemic had highlighted that essential workers were often those earning the minimum wage, including supermarket workers, cleaners, security guards, and public transport workers.

“They placed their safety and their whanau’s safety on the line so that New Zealand could continue to live as normally as possible during lockdown,” it said.

“Ensuring that these workers receive an adequate reward for their efforts during [the pandemic] is the least that we could do to recognise their contribution in the fight against Covid-19.”

Wagstaff said an increase to essential workers’ pay would also be benefit the economy and communities.

“When essential workers get a pay rise, they will spend it in their community, supporting local businesses, getting the car repaired, taking the kids out for dinner.

“It will be a shot in the arm for local communities right around the country as we recover from Covid-19 and the Delta outbreak.”

Research by economists at NZIER and Motu showed unemployment wouldn’t be pushed up as a result of a $2.75 an hour increase to the minimum wage, Wagstaff said.

“Corporations have benefited from the strong economic bounce back – corporate profits are up 17 per cent this year. That means there’s more than enough money to reward our essential workers.

“The Government can and should act now to make this happen.”