Five workplace changes coming into effect

There are five changes to workplace laws that come into effect from either tomorrow, 1 April, or from 6 May.

 1. Minimum wage increase

The minimum wage will increase to $17.70 per hour.

This follows an increase last year from $15.75 to $16.50, and is part of a Government plan to bump the rates up as per the Labour-NZ First coalition agreement to $20 per hour which is planned to take effect 1 April 2021.

The Starting-out and Training rates are fixed at 80% of the Minimum Wage so will increase to $14.16.

There are some exceptions (employees under 16 and others) – see Current minimum wage rates

2. Reinstatement of set meal and rest breaks

Rest and meal break rules will be introduced from 6 May 2019. There is a return to more regulation about the timing, frequency and duration of breaks. “Employers and employees will need to mutually agree when breaks are to be taken. This agreement could be outlined in the employment contract, in a roster or in another system.”

“If there is no agreement set out, the law will require the breaks to be in the middle of the work period, so long as it’s reasonable and practicable to do so. Employers must pay for minimum rest breaks but don’t have to pay for minimum meal breaks.”

It’s also important to remember an employee must be given their entitled breaks; “Breaks cannot be exchanged for extra pay or time in lieu.”

 3. Limiting of 90-day trials to businesses with fewer than 20 employees

From 6 May 2019, 90-day trial periods will be restricted to businesses with fewer than 20 employees. “If you want to use a 90 day trial period for a new employee, it remains crucial that, before starting work for you, the employee has signed an employment agreement containing such a clause.”

Larger businesses with 20 or more employees will no longer be able to use 90 day trial periods.  However, they may continue to use probationary periods to assess an employee’s skills against the role’s responsibilities.

 4. Leave entitlements and protections for victims of domestic violence

From 1 April 2019, victims affected by domestic violence will have the right to request a short-term (up to two months) variation of their working arrangements. This could include variation to days and hours of work, place of work, and duties. Requests can only be refused by an employer on certain grounds.

“If you receive a request in writing, you must respond to it within ten working days.  If you wish to request proof of the issue (such as a medical certificate, court order or police report), you must ask for this within three working days of receiving the request.”

An employee who has been working for you for more than six months will also be entitled to ten paid days leave to deal with effects of domestic violence on themselves or a child. “If you are in any doubt about how to respond to an employee, please seek appropriate workplace specialist advice without delay.”

 5. Strengthened collective bargaining and union rights

The 30-day rule will come back from 6 May 2019. This means that for the first 30 days, new employees must be employed under terms consistent with the collective agreement. The employer and employee may however agree more favourable terms than the collective.

Union representatives also have the right to enter workplaces without consent, provided the employees are covered under, or bargaining towards, a collective agreement.

“Union representatives can only enter your workplace for certain purposes, must be respectful of normal operating hours, and follow health, safety and security procedures. Where no collective agreement or bargaining exists, union representatives still need to seek consent before entering your workplace.”

Source: Ashlea Maley, Senior Workplace Consultant at Employsure

Minimum wage rise versus jobs

The effect that the raising of the minimum wage might have on jobs has often been argued but never been proven. It depends on a number of factors, like how much the minimum is raised, and what the business and employment situation is like at the time.

Government officials have warned that the latest increase, due to come into effect next week (1 April), could jeopardise up to 3,000 jobs but the Minister of Workplace Relations disagrees.

NZ Herald: Minimum wage rise to $16.50 at the end of next week could cost 3000 jobs, says MBIE

Government officials say lifting the minimum wage to $16.50 an hour could see a loss of up to 3000 jobs.

Boosting the minimum wage was part of the Government’s 100-day plan and is set to take effect at the end of next week, on April 1.

In its regulatory impact statement, officials from the Ministry of Business, Innovation and Employment said an increase “may have negative employment impacts which include lower job growth and reduced work hours”.

“The estimated restraint on employment for a minimum wage of $16.50 is 3000,” the statement said.

It also noted that the effect on employment “is heavily debated in economic literature … there is no clear consensus”.

And the Minister, Iain Galloway, debates their warning.

Workplace Relations Minister Iain Lees-Galloway said workers had not had a fair share of economic growth, and the boost to the minimum wage was only one part of the Government’s strategy.

“The Government considers advice alongside a range of other factors, including prior experience increasing the minimum wage – which has always been positive.

“I note that Treasury also advised the best time to raise the minimum wage is while the labour market is strong and tightening.

“Treasury forecasts that the unemployment rate will keep falling towards 4 per cent over the next three years, and that average wages will rise on average at about 3 per cent a year over that time, due to a tight labour market.”

So Lees-Galloway seems to be dismissing the MBIE advice, and choosing to use different Treasury advice to support the increase.

This is a fairly modest increase in the minimum wage, from $15.75 to $16.50, but bigger increases are planned.

Labour and New Zealand First have agreed to increase the minimum wage to $20 an hour by April 2021.

One could guess that MBIE may have further job loss warnings if it is bumped up more.

And what if in the future Treasury advises that the labour market is no longer strong and tightening? Would the Government go against that advice?

They already have, last month. Stuff: Labour warned if economy turns, minimum wage plans will hit the young and unskilled

Treasury is urging the Government to ditch its plan to abolish the youth rate, warning that minimum wage pledges will hit the prospects of younger, unskilled workers if the economy cools.

Advice from Treasury officials released under the Official Information Act shows Treasury expressing concerns that a commitment to a substantial increase in the minimum could harming the prospects of the very people the rate was meant to protect.

While Treasury explicitly said it supported hiking the minimum wage by 75 cents an hour to $16.50 in April, as the economy and labour market would see little impact, officials warned the three-year plan to get the minimum wage to $20 could have a series of unintended consequences.

These ranged from hurting the local economy in already slow growth regions, the risk that once New Zealand’s minimum wage was on a par with Australia’s, fewer young, low-skilled worker would cross the Tasman for work and that higher minimum wages “has been shown” to attract young people to leave education to enter the workforce.

Lees-Galloway has been quite selective in picking advice to justify Government policy.

He was a Nurses’ Organisation organiser (aka a union official) prior to becoming an MP,

Treasury warnings about minimum wage, youth rates

It isn’t surprising to see a warning from Treasury about possible adverse effects of pushing up the minimum wage too much, and of abolishing youth rates.

Stuff: Labour warned if economy turns, minimum wage plans will hit the young and unskilled

Treasury is urging the Government to ditch its plan to abolish the youth rate, warning that minimum wage pledges will hit the prospects of younger, unskilled workers if the economy cools.

Advice from Treasury officials released under the Official Information Act shows Treasury expressing concerns that a commitment to a substantial increase in the minimum could harming the prospects of the very people the rate was meant to protect.

While Treasury explicitly said it supported hiking the minimum wage by 75 cents an hour to $16.50 in April, as the economy and labour market would see little impact, officials warned the three-year plan to get the minimum wage to $20 could have a series of unintended consequences.

These ranged from hurting the local economy in already slow growth regions, the risk that once New Zealand’s minimum wage was on a par with Australia’s, fewer young, low-skilled worker would cross the Tasman for work and that higher minimum wages “has been shown” to attract young people to leave education to enter the workforce.

But the advice provided a key policy challenge for the Labour-led Government, warning that should the economy turn, a world-leading minimum wage would harm young people, so the youth rate, also known as the starting-out rate, should be maintained.

I would replace “should the economy turn” with an inevitable “when the economy turns”.

Treasury said that in economic downturns, employers tended to keep existing workers on without cutting wages, but cut costs by not hiring and employing new staff on lower pay rates.

“This concentrates the minimum wage impact on the groups entering the labour force, like young workers, and those with low skills. The higher proportion of young people on the minimum wage in New Zealand will exacerbate this effect and magnify its impact on youth unemployment.”

“Young workers with low skills are particularly hard hit, and this could impact on those ethnic groups with many young people with low qualifications like Maori and Pacific,” Treasury warned, noting that even during the current buoyant job market, unemployment for young people generally, and especially young Maori and Pacific people, was far higher than for the general population.

There is a problem when unskilled workers remain on low wages.

But many people get onto the employment ladder at minimum wages and youth rates and work their way up.

If those low wage starting opportunities are scrapped it can make it harder for young people and unskilled people to get a start.

Set at 80 per cent of the minimum wage, the youth rate can be paid to workers aged 16-19 in certain conditions including when they first enter the workforce, are coming off a benefit or are in industry training.

Treasury urged the Government to consider maintaining the system, saying it provided “a safety valve in weak economic conditions”.

“We are aware that the starting-out rate is currently not widely used by employers (so currently the consequences on young people of keeping it are low) but it provides a safety-valve of enabling increasing use in an economic downturn.”

Has the Government listened to these warnings?

While Labour has consistently promised that within 12 months of being elected that it would abolish the youth rate, on Saturday Workplace Relations Minister Iain Lees-Galloway was non-committal.

“It’s something that we will include in our policy development and we will work with our Government partners on.”

Or is this another case of walking a different walk to their campaign talk?

 

Minimum wage and potential unintended consequences

One of the biggest risks with changes promised by the incoming Government is the rapid increase of the minimum wage, from the current 15.75 per hour to $20 by 2021.

There’s no argument that many workers struggle on low wages, so increasing them is a laudable aim, but there is real potential for unintended consequences, and it won’t be known what impact they might have until they happen.

Increasing wage costs for businesses means those costs of goods and services will need to be passed on to customers. It is also likely to result in lower employment to try to reduce costs where recovery of the costs isn’t possible.

The biggest problem may come the pressure on all wages to rise. Those currently earning $3-5 above the minimum wage will still want to be paid more.

And there are signs of this pressure already – NZH: Minimum wage threatens economy: Employers and Manufacturers Association

Campbell said businesses would be worried by what the cost increases would mean for them.

His comments are starkly contrasted by those of First Union, whose general secretary Robert Reid said in a statement the incoming Government acknowledged the huge economic pressure working people – especially low paid workers – had been facing for the last decade.

“Today marks a sea change. We now have a Government showing respect for working people.”

The union was especially pleased to see the minimum wage will move to $20 per hour by 2021.

“Business leaders often say the main thing they need is certainty. This announcement gives them that certainty and now they need to start factoring in significant wage increases for all their workers over the next three years.”

Reid added that the era of 2 per cent a year wage offers was over and employers would need to be looking at annual increases of about 8 per cent to stay at or ahead of minimum wage rises.

It was obvious this would happen – but an increase of all wages by 8%, well ahead inflation, will push up inflation, and possibly increase unemployment.

There is no way of knowing how much bumping up the minimum wage will have, but unintended consequences are certain, it’s just unknown to what degree they will impact on employment and the economy.

Labour’s minimum wage policy

Yesterday Labour announced their workplace policy which included a modest bump in the minimum wage, from the current $15.75 an hour to $16.50.

There has revived arguments over the effectiveness of a higher minimum wage.

Andrew Little says it is just a start.

Maori Television: Promise of minimum wage hike “a start” – Labour

It’s more of a stroll to the dairy than a hike.

The Labour Party promises a boost to the minimum wage as part of its Workplace Relations Package announced today. It says the working class is missing out on economic prosperity, but will $30 extra a week make a real difference?

Labour promises and extra 75-cents an hour, in its first 100 days if elected.

Party leader Andrew Little says, “It’s a start. We’ve still got a heap of work to do in getting people onto the living wage, we’ve got a heap of work to do to get our employment framework in place with the fair pay agreements and every other device we can use.”

Little says in addition to this Labour would increase the minimum wage year-on-year like it had done while in government.

“Starting with the immediate increase to $16.50 an hour in our first one hundred days [we would then] work towards a long term goal of two-thirds of the average wage.

But there is debate over what the overall effects of a higher minimum wage can be.

Chrism56 cites a new study from the US:

Here is proof of what will be the effect of Labour’s minimum wage policy – more unemployment.

Minimum Wage Increases, Wages, and Low-Wage Employment: Evidence from Seattle
Ekaterina Jardim, Mark C. Long, Robert Plotnick, Emma van Inwegen, Jacob Vigdor, Hilary Wething

NBER Working Paper No. 23532
Issued in June 2017

This paper evaluates the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to $11 per hour in 2015 and to $13 per hour in 2016.

Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent.

Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies.

Washington Post: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news for liberals

When Seattle officials voted three years ago to incrementally boost the city’s minimum wage up to $15 an hour, they’d hoped to improve the lives of low-income workers. Yet according to a major new study that could force economists to reassess past research on the issue, the hike has had the opposite effect.

The city is gradually increasing the hourly minimum to $15 over several years. Already, though, some employers have not been able to afford the increased minimums. They’ve cut their payrolls, putting off new hiring, reducing hours or letting their workers go, the study found.

The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one, according to the study, conducted by a group of economists at the University of Washington who were commissioned by the city.

On the whole, the study estimates, the average low-wage worker in the city lost $125 a month because of the hike in the minimum.

The paper’s conclusions contradict years of research on the minimum wage. Many past studies, by contrast, have found that the benefits of increases for low-wage workers exceed the costs in terms of reduced employment — often by a factor of four or five to one.

The situation in New Zealand is different to that in Seattle and the US. How a small increase would affect take home pay for low waged workers is difficult to predict.

 

Labour’s workplace policy

Labour announced their workplace relations policy today.A modest increase in the minimum wage and the retention of trial periods (with some modifications) are included.

Key points:

• Increasing the minimum wage to $16.50 an hour.

This is currently 15.75 so it isn’t a big increase.

• Replacing the current National Government’s ‘fire at will’ law with fair trial periods that provide both protection against unjustified dismissal and a simple, fair, and fast referee service.

• Introducing Fair Pay Agreements that set fair, basic employment conditions across an industry based on the employment standards that apply in that industry.

• Promoting the Living Wage by paying it to all workers in the core public service, and extending it to contractors over time.

• Doubling the number of Labour Inspectors.

Backing fair pay and conditions:

Working for fair pay

Labour will boost the minimum wage to $16.50 an hour and base future increases on the real cost of living for people on low incomes. Over time, we will work towards lifting the minimum wage to two-thirds of the average wage as economic conditions allow.

Labour is committed to being a good employer in government. All core public sector employees will be paid at least the Living Wage, at a cost of $15m, and this will be extended to contractors over time. Labour will also double the number of Labour Inspectors to 110 to help ensure working people’s rights are protected. This will cost $9m.


Fair trial periods

Labour has always supported trial periods for new employees, as a way of giving a person a chance. National’s ‘fire at will’ law is unfair because it denies employees any recourse against unfair treatment and unjustified dismissal. This means an employer can sack an employee without a fair reason, denying that person and their family a livelihood. Treasury has found ‘fire at will’ has created no jobs and not increased hiring of disadvantaged jobseekers. Instead, it has allowed some bad employers to exploit employees.

Labour will replace the existing law with trial periods that include recourse for employees in the event of unjustified dismissal. Employers, particularly small businesses, have legitimate concerns that resolving employment disputes can be time-consuming and expensive. So Labour will establish a new referee service for claims of unjustified dismissal during trial periods. The referee will hold short hearings without lawyers and be able to make decisions to reinstate or award damages of up to a capped amount. This simple, fast, and fair service will be provided free for the parties involved, at a cost to the Government of $4m.


Fair Pay Agreements

Fair Pay Agreements (FPAs) will be agreed by businesses within an industry and the unions representing workers within that industry. FPAs will set basic standards for pay and other employment conditions within an industry, according to factors including job type and experience. The recent care and support workers’ settlement is an example of how employers, employees, and government can come together to create an agreement that sets base conditions across an industry.

By setting a floor, FPAs will prevent the ‘race to the bottom’ seen in some industries, where good employers are undercut by some bad employers who reduce labour costs through low wages and poor conditions. FPAs will create a framework for fair wage increases where good employers are not commercially disadvantaged for doing the right thing.

FPAs will cover all employees and workplaces within the relevant industry. Negotiations on FPAs will begin once a sufficient percentage of employers or employees within an industry call for one. This threshold and the precise implementation of FPAs will be developed in government in consultation with all stakeholders.

See the manifesto chapter for a full list of initiatives.

‘Living wage’ set at $20.20

The contentious one size fits all ‘living wage’ has been set at $20.20 for this year.

The current minimum wage is $15.25 per hour and is set to go up to $15.75 in April.

RNZ: Living wage put at $20.20 an hour

Living wage campaigners are encouraging companies to pay a minimum of $20.20 an hour from July.

The rate, more than $4 above the adult minimum wage, is at the level needed to provide families with the necessities, they say.

Krissie, a cleaner for The Fresh Desk company in Lower Hutt, is paid the current living wage of $19.80 an hour. She said it had made a huge difference to her life.

Of course more money in their pay packet will make things easier.

Low wages are a problem, especially in sectors like aged care.

Calculating one ‘living wage’ for many situations and areas and employee ages and circumstances is an odd approach.

The minimum wage will be sufficient for many young people in their first job who have no dependants and no accumulated debt, especially if they still live with their parents or in the lower cost regions of the country.

But it is paltry for people with families living in high cost Auckland or Queenstown.

The big question is whether it is sustainable for employers who have to pay it, or if they would have to reduce staff or shut down if wage costs get too high.

 

Minimum wage increase

The Government has announced that the minimum wage will increase from $15.25 per hour to $15.75 per hour from 1 April.

A release from Michael Woodhouse:

The minimum wage will increase by 50 cents to $15.25 an hour on 1 April 2016, Workplace Relations and Safety Minister Michael Woodhouse announced today.

The starting-out and training hourly minimum wages rates will increase from $11.80 to $12.20 per hour, remaining at 80 per cent of the adult minimum wage.

“The Government has once again taken care to ensure the right balance has been struck between protecting our lowest paid workers, and ensuring jobs are not lost,” says Mr Woodhouse.

“An increase to $15.25 per hour will directly benefit approximately 152,700 workers and will increase wages throughout the economy by $75 million per year.

“With annual inflation currently at 0.1 per cent, an increase to the minimum wage by 3.4 per cent gives our lowest paid workers more money in their pocket, without imposing undue pressure on businesses or hindering job growth.

“The Government has increased the minimum wage every year since coming to office, from $12 to $15.25. This is an overall increase of 27% compared to inflation of around 11%.

“Our steady increases to the minimum wage reflect the Government’s commitment to growing the economy, boosting incomes and supporting jobs.”

So it is a little bit more than inflation.

David Farrar promotes and defends this at Kiwiblog in The minimum wage under National

So I thought I would point out how the minimum wage has moved from 1 April 2008 to 1 April 2017.

  • Hourly rate – from $12.00 to $15.75 – a 31.3% increase
  • Gross Annual FT minimum wage – from $25,029 to $32,850 – an increase of $7,821 or 31.3%
  • Net (after tax/ACC) Annual FT minimum wage – from $19,798 to 27,684 – an increase of $7,886 or 39.8%
  • CPI (inflation) gone from 1044 to 1218 (estimate) – an increase of just 16.7% (includes GST increase)
  • Real Net Annual FT minimum wage – from $23,097 to $27,684 – an increase of $4,587 or 19.9%

So a FT worker on the minimum wage has 20% higher spending power than nine years ago. That awful oppressive poor hating National Government.

An alternative view from Anthony Robins at The Standard in Minimum wage increase doesn’t meet real costs (the CPI is broken)

Any increase in the minimum wage is better than nothing, but National’s increases have not kept pace with the real cost increases (notably housing) faced by low income earners. That is why we are seeing the rise of the working poor, and increases in homelessness and poverty.

The skyrocketing cost of buying an existing house is not included in the CPI (“Inflation is 0.4 percent, and Mr Eaqub calculates that if house price growth was included, inflation would have been 2.5 percent, or more, in each of the last three years”).

The cost of rent is factored into the CPI with a weighting of 10%, in fact for low income earners rent can be 40% to 50% of their income or more (“The report said the lowest 20 percent of earners spent 54 percent of their income on housing in 2015, compared with just 29 percent in the late 1980s”). So the CPI already massively underestimates the real inflation that low income earners face – and rents are rising fast in Auckland and elsewhere.

There are similar issues with other basics like electricity, which is how power prices have risen more quickly than the CPI.

In short, the CPI is broken, especially with respect to housing. (Over the last three years we have developed a better measure, why aren’t we using it?). Under National minimum wage increase have failed to keep up with the real cost increases experienced by low income earners. That is why we are seeing the rise of the working poor, and increases in homelessness and poverty. Shame.

He also took a swipe at Farrar:

* National’s pet blogger tried to spin the snakeoil on Twitter too – an interesting discussion followed.

From one of Labour’s pet blogger? Throwing around pet names leaves one open to boomeranging.

Another view from further left, Mike Treen at The Daily Blog: $20 an hour now! Make the minimum wage a living wage!

There are widespread and unacceptable levels of poverty in this country and inequality is getting out of control. One way to address those issues in a meaningful way is to progressively increase the minimum wage in real terms.

Should every 16 year old or 18 year old in their first job be paid $20 per hour?

Housing costs are a real and large issue, but bumping up all wage rates to compensate seems to be silly. Far better to sort out housing supply and costs.

Minimum wage and social welfare

Last week the Government announced that New Zealand’s minimum wage would increase 50 cents to $15.25 per hour on 1 April (2016).

The starting-out and training hourly minimum wages rates will increase from $11.80 to $12.20 per hour. It is set at 80% of the minimum wage.

“An increase to $15.25 per hour will directly benefit approximately 152,700 workers and will increase wages throughout the economy by $75 million per year.

For a 40 hour week that works out at $610. Annually it is $31,720.

“With annual inflation currently at 0.1 per cent, an increase to the minimum wage by 3.4 per cent gives our lowest paid workers more money in their pocket, without imposing undue pressure on businesses or hindering job growth.

“The Government has increased the minimum wage every year since coming to office, from $12 to $15.25. This is an overall increase of 27% compared to inflation of around 11%.”

New Zealand was the first country to set a minimum wage, in 1894. Relatively we have one of the highest minimum wages in the world. The current Australian minimum wage is higher at A$17.29, but is as low as US$7.25 in the USA (it varies state to state).

Yesterday Radio NZ had a debate on at How high should the minimum wage be set? (link to audio there).

Eric Crampton, who is an economist and the director of the New Zealand Initiative…

…said among developed countries New Zealand already had the highest minimum wage in relation to the average wage.

Mr Crampton said it was unreasonable to set the minimum wage high enough for people to live off it without any subsidy.

“I don’t think that there is any problem that is solved by the minimum wage that is not better solved through things like wage subsidies and Working for Families,” he said.

The minimum wage was poorly targeted and welfare systems were better placed to support lower-income workers, he said.

“We should look at where the burden of supporting lower productivity or lower income workers should fall,” he said.

“Should it fall on the employers and customers of firms that supply goods and services that are produced by lower income workers? Or should it fall on the tax base more broadly?

“We’ve got a tax system that’s progressive – it tries to spread the burden to where it can be afforded. When we instead put that burden onto employers of lower productivity workers, we knock them out of work.”

Former MP Laila Harré, now the co-owner of a living-wage restaurant…

…said full-time workers should not need to rely on government handouts.

“If people go to work, one should expect to learn a living from that job,” Ms Harré said.

“We have many non-viable businesses keeping themselves viable by surviving on these incredibly low rates of pay, [and] often extraordinarily dangerous working conditions.”

University of Auckland economics professor Tim Hazledine…

…said businesses generally had a great degree of ingenuity to adjust to change.

New Zealanders had a social and cultural expectation that adults should go to work and receive a living wage, he said – and the economy could adjust to that.

The Living age Movement Aotearoa New Zealand increased their suggested minimum to $19.80.

The Movement calls on Government, employers and society as a whole to strive for a Living Wage as a necessary step in reducing inequality and poverty in our society.

Striving for a ‘living wage’ is fine. Whether a much higher minimum should be imposed is debatable.

A problem with a set ‘living wage’ is that one size doesn’t fit all workers.

And if it is set too high then some businesses (and jobs) may not be viable, so the risk is that it would result in higher unemployment and make it more difficult for low skilled and especially young people to get jobs.

New Zealand also has an extensive and increasingly complex social welfare system that supports the unemployed and the unemployable, and also substantially subsidises many low paid (and not so low paid) workers through Working for Families.

Working for Families on it’s own is complicated enough with four types of payments:

  • family tax credit
  • in-work tax credit
  • minimum family tax credit
  • parental tax credit.

As well as that Accommodation Supplements are available and their are subsidies available for pre-school and out-of-school care.

Few would argue over having a minimum wage, although the level will always be debatable.

A higher ‘living wage’ is much more questionable except as an aspiration.

Both broad and targeted social welfare to some extent is expected in a modern society but the levels and availability will always be up for debate.

One problem is that social welfare tack-ons make it increasingly complex, at risk of being in inefficient use of taxpayer resources.

Some call for a Universal Basic Income (UBI):

An unconditional basic income (also called basic income, basic income guarantee, universal basic income, universal demogrant, or citizen’s income) is a form of social security system in which all citizens or residents of a country regularly receive an unconditional sum of money, either from a government or some other public institution, in addition to any income received from elsewhere.

A UBI may simplify things but would be difficult to transition to if it meant (as it would probably have to) that some people would get less than they do now, unless it was encumbered with supplemental assistance.

It’s easy to tack on increases, but reducing benefits and subsidies when people have adjusted to and become reliant on current income and welfare levels is tricky and risky.

Some sort of overhaul and simplification of our wage and welfare systems has some merit but would be very difficult to implement unless the country suddenly became rich enough to pay a lot more.

Union wants 40% wage increase

Perhaps unable to negotiate higher wages with employers the FIRST union wants the government to do their work for them by increasing the minimum wage 40% to $20.65 by 2018.

One News reports Union wants a 40 per cent minimum wage boost.

The FIRST union, which advocates for 27,000 finance, industrial, retail, stores and transport workers wants the current rate of $14.75 increased to $20.65 in 2018.

It wants the government to hike the rate in three steps, starting with a $1.75 rise to $16.50 this year.

“A 25 cent or 50 cent increase won’t cut the mustard for working people and their families,” said the union’s general secretary Robert Reid.

He says the increase in the wage would help boost and cut inequality.

Reid wants these stepped changes to the minimum wage:

  • Current – $14.75
  • This year – $16.50
  • 2017 – $18.46
  • 2018 – $20.65

Perhaps this is in response to and despair at Labour announcing they want to pile money into free tertiary education, which is targeted at a different demographic to many of the First union members.

Union members are not seen as being in the magic middle New Zealand vote bucket.

FIRST Union (Wikipedia):

FIRST Union is a national trade union in New Zealand that was formed on 1 October 2011 by the merger of the National Distribution Union and Finsec.

FIRST has a membership of more than 26,000 and is affiliated with the New Zealand Council of Trade Unions. It is also affiliated to various international federations through its five sectors; Finance, Industrial (Textile, Clothing, Baking, Wood, Energy), Retail, Stores (distribution and logistics) and Transport.

FIRST is not affiliated with the New Zealand Labour Party, but former NDU secretary Laila Harré did serve as leader of the Internet Party in 2014.