Govt ignores MBIE advice on minimum wage

Stuff reports:

A hospitality business owner says the Government is sending mixed signals after ignoring advice about delaying the minimum wage increase and recommendations for a smaller rise after Covid-19.

The minimum wage report by the Ministry of Business, Innovation and Employment (MBIE) published in December 2020 advised delaying the increase until October, and by 25 cents, or 1.3 per cent, due to the economic uncertainty.

However, the Government ignored this advice and confirmed the minimum wage would rise by $1.10, or 5.8 per cent, to $20 an hour from April 2021, sticking to its election promise.

Auckland cafe owner Chris Monaghan said 2020 was a tough year for every hospitality business, and the 5.8 per cent increased wages would add greater pressure on the sector.

Businesses can handle increased wage costs when they have increasing revenue. But when they have declining revenue, increasing wage costs will send many under.