Minimum Wage Concerns for Retailers

MEDIA RELEASE

For immediate release

11 January 2006

Retailers concerned about increase in minimum wage

The Government's decision to raise the minimum wage by 8% does not auger well for the retail sector at the time of a general slow down in the performance of the economy and a flattening of retail sales, says John Albertson, CEO of the New Zealand Retailers Association.

Whilst we accepted that a modest rise was warranted in line with general wage settlements in the past year we have real reservations that an increase from $9.50 to $10.25 can be sustained by many owner operator retailers.

The greatest concern is the negative effect this may have on entry level staff.  Faced with a choice between a low skilled entry level candidate and a more skilled person, the employer is likely to opt for the latter.

The other key concern is the likely ratchet effect on people trying to retain relativity.  Higher wages should be linked to improvement in productivity through skill development, concluded Mr Albertson.

-end-

Further Information: 
John Albertson 
Chief Executive Officer
027 445 9400
jalbertson@retail.org.nz

Barry Hellberg 
021 673 480
Government Relations Consultant
bhellberg@retail.org.nz