Minimum wage used as lever, say employers

Press, 30 August 1985, Page 5

Minimum wage used as lever, say employers

PA Wellington Employers believe the Federation of Labour may be trying to use the new minimum wage as a lever for unreasonable wage claims in next month’s wage round. After the Government announced the increase, the president of the F.0.L., Mr Jim Knox, said the federation was pleased that the Government had recognised the position of low-paid workers by its $7O increase in the minimum wage. “We expect employers to follow the Government’s lead in this regard by giving substantial increases to all low-paid workers,” Mr Knox said.

The advocacy director of the Employers’ Federation, Mr Steve Marshall, yester-

day said the minimum wage had nothign to do with the negotiation of awards in the wage round.

“Our concern is that they are using an acceptance by the three sides (the Government, the employers and the unions) that the minimum wage must be realistic as a means of hyping up the award structure,” Mr Marshall said.

“The new $l7O minimum wage has no relevance to awards, and employers will negotiate what is appropriate to their industries. “Indeed, we expect higher payments for skills and each document that will be negotiated must be seen as a separate entity,” Mr Marshall said.

The employers’ concern was that union members would claim that they had a

traditional pay margin above the minimum wage. That had been true when the minimum wage was at an unrealistically low level.

Mr Marshall said that the latest F.O.L. line made him wonder if the employers had been right to negotiate over the minimum wage at all.

To the suggestion from some unions that $2OB a week gross would be their target for award claims, Mr Marshall said that $2OB had emerged from an attempt to link pay rates with the benefit to an unemployed married person which had not been frozen during the freeze.

“The wage system is based on a single person. That'must be the basis of comparison — you must compare apples with apples,” Mr Marshall said.

The Employers’ Federation estimated that increases above 5.5 per cent in the over-all wage bill would mean the nation’s competitiveness with other countries would be lost.

“If every employer who has basic 'rates of $l7l a week put them up to $2OB the effects would be very serious in costs and profits, and the result would be markets and jobs lost,” Mr Marshall said.

An employer had the choices of higher prices, lower profits, or laying off staff to recover from such increases, he said.

“The big problem is we are used to Government intervention and are not used to being responsible ourselves. This applies to the unions as well as the employers,” Mr Marshall said.