Brooke van Velden: Minister for workplace relations and safety discusses minimum wage rise

Workplace Relations Minister Brooke van Velden's refutes claims her minimum wage increase is 'piddly'. 

The minimum wage will rise to 23-dollars-and-95-cents next April -- a 45 cent increase. 

Labour's called the hike 'piddly and weak' -- while also claiming in real terms, it's a pay cut for some New Zealanders. 

Van Velden told Ryan Bridge that's simply not true as it aligns with forecast inflation. 

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Episode Transcript

Speaker 1 (00:00):
Minimum wages going up to twenty three dollars ninety five
an hour. This is from April. That's a two percent increase.
Annual inflation in the year to September was three percent.
Labour Party says, this is Piddley. It is a in
real terms pay cut. Brook van Valden is the Minister
for Workplace Relations and Safety with me tonight, Brook, good evening,
Good evening, Ryan. Why two percent? You went with one

(00:22):
and a half last year? Why two this year?

Speaker 2 (00:26):
Well, we've gone with two percent because I think it
is a real balancing act between the cost of living
pressure that some people are rightly facing and also the
additional cost of businesses. When we know businesses have been
struggling for the last few years and unfortunately the economic
recovery that we hope would happen really quickly has taken
a little bit longer to get moving. And so, you know,

(00:49):
one of the things I was really concerned about this
year was youth unemployment. And you know, if we want
more young people to be able to get those jobs,
and we know young people are disproportionately paid minimum wage,
if that's set too high, then they're also more exposed
to employers responding to that by reducing hours or not

(01:09):
hiring any new people. So when we've got youth unemploymented
around fifteen percent, I want more young people in those
really early on career jobs. And if we get this
balancing act right, I think next year will be a
really good year. But I think the other thing that's
kind of missing here is I'm setting it for April
next year. Treasury and the Reserve Bank are expecting inflation

(01:32):
around two percent next year, so this is in line.

Speaker 1 (01:36):
I agree that the whole labor line about inflation. The
dates don't match up. That's fine, let's put that to
one side. Did you get any advice on two percent?
How many jobs would not be created as a result
of you increasing that?

Speaker 2 (01:51):
So the advice that I had from MB was to
go with a two percent increase, which is, you know,
for me following their advice. They didn't necessary really have
too much concern with two percent on the use unemployment
rate or unemployment rates with normally, But the overall advice
was if it's set too high. The effect is that

(02:13):
there are labor market tip and.

Speaker 1 (02:15):
In my experienced minister having covered these for many years now,
they do give you a specific number. At this level,
you risk so many jobs X y Z not being created.
Did they not provide you that level of detail this
time around.

Speaker 2 (02:29):
Look, I'm sure those specific numbers are somewhere, but they
weren't anywhere that was leading to any great concern for me.
So I've parked that to one side. So the main
concern for me here is that we know that businesses
have been struggling. You know, GDP has not taken off
as quickly as we wanted it to be. I do
have hope for next year, but if we have businesses

(02:51):
who are seeing increased costs themselves.

Speaker 1 (02:54):
They may not creatematic approach, yeah, but they may not
create jobs.

Speaker 2 (02:58):
Right.

Speaker 1 (02:58):
That's the risk when you put and the minimum wage
up is that jobs aren't created, but you're not across
how many might not be. Let's part that for a
second and go to the other side of the coin.
Jan Tinetti says, this is piddly and pathetic.

Speaker 2 (03:14):
Oh, it's just not true. I mean, for people who
are the most affected here, it's mostly young people who
are on the minimum wage that'll be seeing an increase
in line with what the Reserve Bank and Treasury expect
as forecast inflation but we also have to be very
aware that we are in difficult economic times. You know,

(03:35):
a lot of people across the board are not seeing
increases or large increases to their pay. What we're wanting
to ensure is that we have a growing business confidence,
so that businesses know that they can go on and
create more jobs into the future. That's where my expectation
lies that next year will be a good year with

(03:55):
more job opportunities.

Speaker 1 (03:57):
Minister, appreciate your time. Thank you, Brook van Valven, Minister
of Workplace and Safety. For more from Hither Duplessy Allen Drive,
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