Minimum Wage and Living Wage in New Zealand - Essay Example

?Minimum Wage and Living Wage in New Zealand Workers are considered to be the stronghold of an economy. This depends on their earnings and spending, which is solely controlled by their employer. Workers with a higher wage will increase their spending, while the lowly paid workers will have a low spending. In this respect, there are two types of employers, including private employers and the government. In their mutual agreement, they have to ensure the plight of workers in regard to their pay is given solid attention. This shows the reason why the New Zealand government has initiated the minimum wage law. The minimum wage law dictates the amount of cash that a worker is to earn, in a particular hour of work. The minimum wage should not be surpassed by the employer, as it is stated in the rights of the workers. However, there have been emergent issues on making the livelihood of the workers better. The issue of introducing the living wage to workers is debatable in such a country, when there is focus on the living standards. The question is; should New Zealand raise the minimum wage of workers to the living wage of families? In this question, there are some people for the issue of introducing the living wage, whilst some of the people in the country have their issues with the law. Therefore, expounding on this issue would be appropriate in coming up with better decisions. This qualitative study will involve holding a semi-structured interview with a relevant party. The secretary general of Amalgamated Workers Union New Zealand will be interviewed at a time appropriate for them. A set of open-end questions will be asked relating to the living and minimum wages for workers. The study is important considering that both workers and employers are faced by constraints that need to be dealt with. The study will be useful in helping policy makers make considerations of various factors for the good of workers, employers, and the economy. Minimum Wage and Living Wage in New Zealand Introduction New Zealand is the country that has been struggling to make a positive impact in regard to its economic performance (International Energy Agency, 2011). It is an admissible fact that the most outstanding structure in making an improvement in its performance is by focusing on the employment levels and payment to workers. When a country has a high employment level, it is endowed with maximum labor. With such amassed labor, the country will be in a point of making a positive economic performance. This is due to the established production that will come from the labor intensity. In actual sense, a country initiates making greater employment for its citizens in order to make a plausible performance. In recent economic times, countries have been struggling to ensure their population is employed, with a decent work and pay. However, this is dependent on a number of factors. These factors make it hard for a country to make full employment of the population, and give decent work. These factors include capital intensity, production, ability to pay the workers and the growth rate of the economy. When the above factors are considered at acceptable standards, the country will have a positive encounter when it comes to employment. 1. An overview of the subject The topic Though employment is the main factor in this research, the minimum wage is a solid factor to consider. This is heightened by the fact that all people in the world need a decent work for their living. Decent work denotes a person being contented with the working conditions, the wages and returns from other jobs. Wage is defined as the reward given to workers, after offering their services. The wages given is remuneration for the workers, depending on the work and services they have offered. Therefore, the workers will be given their wages according to the work they have offered, depending on some other factors. Theses factor include experience, education level, merit and entry level. This shows the reason why many people may be in the same employment, but have different remuneration. The managers are mandated to ensure that people are given their dues accordingly (Neumark & Wascher, 2008). This is to show professionalism and initiative to have a fair working environment. In addition to this, worker’s remuneration is likely to affect performance. Workers are sensitive when it comes to wages, and will act according to their party. For instance, discrimination that is utterly declared in a place of work will affect the discriminated workers. In the end, their will to work will be shuttered by their meager pay. In the end, the business unit will not have a good performance. The central research question in this paper would be: should New Zealand raise the minimum wage of workers to the living wage of families? Answering this question will be vital in gathering information that should be used in evaluating the economic performance of New Zealand. There are key points that will be considered in this research, including the economic performance over the years, spending of the government, employment conditions, payment schedules and other economic factors. This will give succinct orientation on the research topic and how New Zealand could contain the issue (Zanko, 2003). This research will involve information gathering techniques that will be used to gather first hand information on the minimum wage definitions and the prevalent situation in the country. With such information, the research will be at a position of exploring the issue and any other control measures that could be used to make the situation better. Workers have dependants and have to cater for their needs in every manner. This shows that some people work to feed their families, educate their relatives and secure shelter. With such considerations, the economy has to ensure that all workers have a considerable minimum wage to the population, if not the living wage (Neumark & Wascher, 2008). This will assist in ensuring the population is at a better economic stage, which secures the population to cater for all their needs. However, the situation could be made better with a focus on the living wage. The New Zealand government has been on the frontline in ensuring the population of New Zealand has the best living. In the recent past, a third of the population in New Zealand was considered to be living in 16 main urban areas. In a continued survey in the country, it was considered that 53% of the population had their residence in the four largest cities in the country. This includes Auckland, Christchurch, Wellington and Hamilton. This shows that half of the population is considered to be living in highly rated places. However, the population living in these places should have a considerable wage, which will ensure the maintenance of their expenses. Similarly, the government should be on the frontline in ensuring the people living in the other areas that are not of international standards are improved. Minimum wage is a factor that should be considered in any economy that needs to perform to a better level. However, increasing the focus on the living wage leaves a lot in desire for the workers. Apparently, all economies in the world depend on the expenditure that is derived from workers. Therefore, workers will only spend the amount of cash that is earned. In economic sense, workers that have a low earning rate will only spend what they have. In some bizarre instances, the workers will have to spend more than their earnings. This is a retrogressive approach to an economy that needs to develop (Freeman & Haynes, 2007). Since the workers will have spent all their earnings, and are indebted, they will have no room for investment. Whereas investment is a prioritized approach to development, the economy will still have a low performance. In such a state where earning is less than the expenditure, the workers will have an increasing debt. This burden will be shifted to the whole economy as it has to make measures that will reduce the menace. Minimum wage is also considered to be the legal remuneration that is payable to workers, after performing their duties. The employers are considered to be legally constitutional when they give their workers the amount of [pay they need after performing their duties. With such a commitment from the employees’ side, the workers have to rely on the employee’s decision on their pay. With such conditions, the workers have less to control over the minimum wage. According to statistics, New Zealand is considered to be the mother of the “minimum wage law”, which was first introduced in the year 1894 (Smitz, 2005). The law considered that workers should be paid in accordance to the work they have done during the working hours. In actual sense, the proportionality of the pay and the work done should be considered equal to both the worker and the employee. This was an initiative that was highly accepted as most of the workers would have a better pay at their work places. There is a difference between living wage and minimum wage in a number of ways. First, minimum wage denotes the lowest amount a person should earn per every hour of work. On the other hand, living wage denotes the amount of earning a person should receive to meet all the basic needs. In this context, the minimum wage is dependent on the working conditions and the payable returns, whilst the living wage is solidly dependent on the basic needs of the worker (Smitz, 2005). In making this clear, the basic needs of the worker will have an impact on the wages earned per working hour, whilst the employer will decide on the actual amount that could be payable per worker during the working hours. The minimum wage is also dependent on the working conditions of an employer. This is due to several considerations that emanate from the working conditions. First, workers that are involved in machinery operations that pose danger are paid a higher minimum wage (Neilson & Collins, 2004). This is due to the safety and probability of incurring injuries. Secondly, working conditions that expose the worker to health hazards are considered to have a higher minimum wage. This is due to the health conditions that the worker might have to treat in working in this state. Thirdly, the minimum wage will be dependent on the dressing code in the working area (Kramp, 2009). Some workers need extra dressing to work in the environment, which makes it uncomfortable. Therefore, they will need an enhanced minimum wage to maintain their job. For instance, some workers have to put on extra heavy aprons to protect themselves. This is a condition that will make the worker uncomfortable in the working area. To appease such a worker, the remunerations should be put at a tolerable state (Freeman & Haynes, 2007). If this is not done, the worker is likely to look for a better employment that has comfort, in regard to its clothing and minimum wage. The New Zealand income structure has several conditions that should be adhered to by all workers. According to the Wages Prevention Act of 1983, all wages must be paid, without unlawful deductions from the concerned parties. Secondly, the wages should be paid in New Zealand coins or bank notes. 2. A critique of the literature review Employment benefits and remuneration is a varying factor in different countries, depending on their economic muscle, performance and employment rate. Therefore, a county may have different minimum wage as compared to another in light of the stated factors. In New Zealand, there are three groups of workers that are considered to be in the minimum wage bracket (Spoonley, Dupuis & De Bruin, 2004). These are the workers that are paid at a lower rate in consideration to other workers in the country. The first minimum wage group is the adult minimum wage (Zanko, 2003). This is the minimum wage that is payable to all adults that are in the employment sector. An adult minimum wage is payable to all workers that are over 16 years of age, but are not considered to be new entrants nor trainees. The second group is the new entrants’ minimum wage which applies to employees aged 16 and 17, but has only been for a period less than 200 hours or an equivalent of three months. In the latest statistics, it is considered that a new entrant in the minimum wage should earn $ 10.80 an hour, due from April 2012. Last group is the training minimum wage, which is $ 10.80 per hour. This group denotes people over the age of 16, but is required by the employer to undergo training, depending on their work. New Zealand has stipulated rules on the credibility of employees in regard to the minimum wage. First, the state has not set any standard to people aged below sixteen years. Therefore, workers below the age of 16 years are not protected by the law in regard to their minimum wage earning. Secondly, these rates are given before tax. The workers are therefore under obligation to pay for their own taxes, as they have the minimum wage that is protected by the law. Thirdly, holidays are not inclusive in the minimum wage. Therefore, the employer is under obligation to pay the workers for the services offered during holidays. With these conditions, the employers in the state have to ensure that there is complete adherence to the workers’ minimum pay. The labor department has been mandated to ensure workers are given their due pay, including holiday pay for the work offered. If this is not adhered to, there are possible consequences from the labor department’s (Spoonley, Dupuis & De Bruin, 2004). Since the labor department is in control of the stated laws, they have to ensure the workers are fully protected. When there is a breach of these enacted laws, the labor inspectors are informed. They have to conduct their research ion the information, including asking workers questions about the situation. If the employer is found to be non-compliant, the labor department is legalized to make the possible actions. There are a number of key debates on the topic of minimum wage in New Zealand, and have been prevalent in the labor market, whilst some have also been directed towards living wage. In this topic, there are two sides that have been prevalent in bringing out the debates. The first group is the supporters, while the extreme opposition side denotes the proposers of the minimum wage, inclusive of the living wage. The supporters of the initiative have their points to stress on to the point, whereas they are in acceptance of the minimum wage law. In their initial point, they stress that minimum wage increases the standard of living of workers (Smitz, 2005). Workers are considered to have equal rights to their employers, who are highly paid and living at higher standards. Since the employers are living at higher standards, the employees should also strive to live at better places. Therefore, leaving the minimum wage at the mercy of the employers would not be an appropriate maneuver. The employees are likely to discriminate the employees in the end. In their second supporting point, the minimum wage law reduces poverty. Before embarking on setting the standard minimum wage, the state conducted a research on how the employers earn in the country, in addition to other factors. This placed the employees at a better place, which does not accept low wages. Therefore, when workers are given the minimum wage, the government is sure that they will fend for their needs. The workers will be sure of the lowest amount of cash that is payable at the end of the paying period, which is positive. This will in return improve their budgetary estimates, which will reduce the poverty levels (International Energy Agency, 2011). In addition to this, the average workers will have a decent living. If some people are not paid according to the minimum wage, it is possible that their earnings would be lower than their expenditure. This would further deteriorate their living, instead of making it better. Lastly, the supporters argue that minimum wage forces businesses to be more efficient. The businesses have a considerable expense in terms of the minimum wage to the employees (Muirhead, 2001). Therefore, the business will have to structure possible maneuvers that will increase its productivity. It is evident that businesses that have high expenses will have to increase their productivity and come out with plausible returns. Businesses that do not endeavor to take on this challenge will likely plunge into losses. With such conditions, the businesses will keep their working trend at the most appropriate part. Opponents of the minimum wage law have been on the frontline in giving issues that denote the backwardness of the law. First, the opponents insist that it increases unemployment. According to their issue, when minimum wage is very effective in a work place, the workers’ efficiency will be closely monitored by the supervisors. This will increase on the efficiency of the work place (Neumark & Wascher, 2008). In the end, the employer will achieve the set goal of the business unit. With such an induction, there will be less or no need for new employees in the facility. This leaves a stable unemployment rate in the country, as the other workers will not be absorbed in the job market. Secondly, the opponents are concerned with workers with very low productivity due to inexperience or handicap. Some of the workers in the work place are less experienced and will denote a less production. Since the employer is hell-bent on ample production, such employees will be frustrated. This could lead to their termination, which increases the unemployed percentage in the country. The same could apply to handicap people in the work place. Handicapped people have disabilities and may work without efficiency (International Energy Agency, 2011). Working without efficiency will definitely lower their productivity, which is inadmissible by some of the employers. With such a condition of lesser productivity, the employer is likely to terminate the worker, since the worker is not apt in production. The third opposing point in minimum wage issue is that it is harming less skilled workers. It is evident that when the minimum wage is set, the employers have to employ competent personnel to increase in their production. Since they are in need of highly qualified personnel, the semi-skilled workers are given lesser priority when in the employment sector (Figart, 2002). For instance, an employer will only employ workers that have been in the sector for long, and will regret on hiring and training employees, which is expensive. Using such measures would create havoc in the employment sector on the side of semi-skilled workers as they will find it hard to get a decent employment. Lastly, it is a considerable fact that employees find it hard to employ some groups in the work place. They end up excluding some groups from the labor market. For instance, some employers would only prefer the male sex to the female gender. In addition to this, it is less effective in making an equal employment opportunity in the country. There are evident trends that have been noted in the minimum wage debate. Some of the Trends include making workers union, initiating seminars and sensitizing on the effectiveness of minimum wage. These trends have been effective in mending the gap between the minimum wage proponents and opponents. However, there are still some Key gaps in minimum and living wage. Living wage has not been considered due to a number of reasons (Smitz, 2005). First, the definitions of the basic needs of some people vary, yet they are in the same working group. This creates a hurdle in making decisions. Secondly, the living standards of the people vary from place to place. This makes it hard to decide on the appropriate level of the living wage. And lastly, the preference of some workers varies. This will create a bridge between the workers and their needs. 3. Methodology For this study, a qualitative study will be done. The study will be qualitative in nature considering that responses will not be numerical. The methodology will involve gathering of information from concerned parties to be used in making decision. There is a gap between the living wage and the minimum wage that should be initiated to make the appropriate decisions. In this paper, an interview with the secretary general of Amalgamated Workers Union New Zealand will be appropriate (Spoonley, Dupuis and De Bruin, 2004). The secretary is versatile with information from the workers and their remuneration. The secretary general will have to answer several questions that would be vital in making a solid stand of the paper. The interview schedule will involve an official arrangement to meet with the interviewee at an appropriate time. Since this is a questionnaire, the interviewer will have to make the set of questions to retrieve information. An open interview would be appropriate, since some matters would arise, and would need clarification. Conclusion This paper has succinctly explored the possible issues that are in the New Zealand job market in regard to the minimum wage, and a plan to initiate the living wage. There are possible considerations that have been put in place to ensure the workers are protected of their minimum wage. These factors are considered useful in ensuring the workers are at par with the laws. However, there are two sides that are involved in the scuffle for minimum wage and living wage. The supporters insist that it improves the living standards, reduces poverty level sand makes a decent living. However, the opposing sides insist that the initiative plunges some groups into unnecessary unemployment. Similarly, the initiative puts pressure to the employers in ensuring the business entities are profitable. With such opposing groups, the debate on living wage will only increase the speculation on the possible damages and positives. References Figart, D. (2002). Living wages, equal wages. New York: Routledge. Freeman, R. B., & Haynes, P. (2007). What workers say: Employee voice in the Anglo-American workplace. Cornell University Press. International Energy Agency. (2011). OECD economic surveys: New Zealand 2011, Issue 9. Auckland: OECD Publishing. Kramp, O. (2009). Minimum wage legislation in Australia. New York: GRIN Verlag. Muirhead, J. (2001). Living & working in New Zealand: How to build a new life in New Zealand. New York: How to Books. Neilson, M., & Collins, M. (2004). Going to live In New Zealand. New York: How to Books Ltd. Neumark, D., & Wascher, W. L. (2008). Minimum wages. New York: MIT Press. Smitz, P. (2005). Australia & New Zealand on a shoestring. New York: Lonely Planet. Spoonley, P. Dupuis, A., & De Bruin, A. (2004). Work and working in twenty-first century New Zealand. New York: Cengage Learning Australia. Zanko, M. (2003). The handbook of human resource management policies and practices in Asia-Pacific economies. Vol. 2. Auckland: Edward Elgar Publishing. Appendix 1: Interview Questions 4. Do you consider the minimum wage an appropriate approach to workers? 5. Do workers and employees consider a shift from the minimum wage to the living wage? 6. What percentage of employers is likely to support the living wage approach? 7. Is there any consideration before initiating the minimum law wage? 8. What control measures ensure workers are not harassed by the employees? 9. Are workers expected to earn above the minimum wage? 10. Is there a policy that controls remuneration of workers over long service? 11. Is the southern Amalgamated Workers Union New Zealand considering initiating the living wage? 12. What determines the living and minimum wage? 13. Will gender as a factor affect the living wage of a person? 14. Is age a considerable factor in the living wage? Read More